Are you a Tory-voting IT contractor? Congrats! Osborne is hiking your taxes Benefits recipients, “non-doms” (those living in Britain treated as foreigners for tax purposes), banks, and landlords weren't the only losers in George Osborne's recent budget. Although they weren’t explicitly mentioned, the chancellor put many contractors, including those working in IT, on his hit list by changing the …
And I'm sure there are a load of perms laughing their heads off and saying we deserve everything we get.
But consider this, how much did the UK gov give the big consultancies in contracts. How much corporation tax did they pay in relation and how much did they deliver vs not deliver. And then ask yourself who are the real tax avoiders and who are value for money consultants.
Once more the Tories looking after their mates and shitting on the hard working middle.
I didn't vote for the cnuts.
The article didn't mention that as freelance consultants we don't get sick pay either.
A bit of extra tax is one thing, but if they make it more complex and risky then contractors are more likely to seek refuge in permie roles as they will at least will get some perks like pension contributions/sick pay/redundancy entitlement/HR protection from unscrupulous managers/protection from unfair dismissal etc.
At which point, believe it or not, the government will get less tax, not more.
Really? Damn. I guess the Tories will just have to cut even more public services and sell off the NHS even faster. Of course that haste means they won't be able to negotiate the best deals, so their rich mates will be paid more and buy for less, but that's a sacrifice they're willing to make.
"I guess the Tories will just have to cut even more public services "
Great, I would rather choose to buy services I need rather than be forced to pay for those I don't.
"and sell off the NHS even faster"
Just to point out that the last Labour government privatised approx. 10 times the value of NHS services that the Conservative ever have.
"Great, I would rather choose to buy services I need rather than be forced to pay for those I don't."
Yes. How much are you prepared to pay for your childrens education, per mile rates for road usage, having fresh water tankered in, emptying your cesspit, personal bodyguards (no Police if you don't pay). And don't forget to make sure your fire insurance is paid and up to date with a company who has a fire appliance stationed near you. You don't want one from a rival turning up then watching your house burn down because you're not their customer.
I'm pretty sure that not only would you find your fully itemised bill for all the "public" service you get from your taxes would be higher, but those services you rarely use would no longer be there for you when you need them because everyone else will do as you do and not pay for the local seviceseither because they can't can't/won't afford them (hey, we can have an extra holiday!) or few use them often enough to be viable. £5 per head per visit to the local park maybe?
"Yes. How much are you prepared to pay for your childrens education"
I already pay quite a lot.
"per mile rates for road usage"
Already pay that via fuel duty.
"having fresh water tankered in"
I already pay the water company for that based on what I use.
"emptying your cesspit"
See the above - I already pay based on water usage - except we have sewers down South.
"personal bodyguards (no Police if you don't pay)"
We already have private security patrols where I live.
"And don't forget to make sure your fire insurance is paid and up to date"
It is.
Not exactly. In a just and well-run world, they'd shut off services that yield marginal benefits, are excessively expensive, or that haven't been proved to actually work.
I kill me, I really do. If your politics work like they do in the US, shutting off those sorts of things would stop the flow of cash to their pockets or their crony's pockets. They'll just take the page out of the 0bama playbook, threaten to shut down all sorts of essential services, and hire new sentries in order to block the public from using facilities that don't cost anything to erect, and cost nothing to maintain. After all, being a heel pays big dividends and with the press in your back pocket, unlikely to generate a backlash.
Don't believe me? Google 'obama blocks world war 2 memorial'.
Then I guess you're living in the mountains growing your own food, laying your own road, educating any kids yourself, you've paid for every visit to hospital, you've always paid full price for your prescription pharmaceuticals or you're some right loonie in the US.
Grow up and recognise that you're part of a civilised group and that the teeny amount extra you pay for things like, road, water, sewage disposal, education, health etc etc make life a lot easier for all.
"and sell off the NHS even faster"
They're committed to making it free at the point of delivery, so what does it matter that the doctor you see is on the government payroll or not? Businesses can save money and cut risk by hiring consultants, why not let the government do the same?
The article didn't mention that as freelance consultants we don't get sick pay either.
Freelance consultants work for their own companies, so if you are unhappy with the amount of sick pay that you have negotiated with yourself, take your self aside for a quiet drink and talk it through until both you and yourself are content with the perks and remuneration that you get for working for yourself.
"Freelance consultants work for their own companies, so if you are unhappy with the amount of sick pay that you have negotiated with yourself, take your self aside for a quiet drink and talk it through until both you and yourself are content with the perks and remuneration that you get for working for yourself."
I agree totally, I treat myself as an employee of my company,I have to factor in 'down time' every year to cover wages, factor in sick days, pension contributions, etc... which means I pay myself much less than I would get as an employee of a big company, on a good year I have a decent dividend, on a slow year I pay none and be thankful I managed my business finances well enough to be able to cope with slow years..
That is the risk of running your own business.
"Once more the Tories looking after their mates and shitting on the hard working middle."
I give a lot of money to Tesco, but they're not my mate. Just because the government pays consultants doesn't mean they are friends with them. Same goes for government and its own employees.
"And if you work in a technical field in Germany you will find they are pretty much all fluent in English. Most of the technical terms are used as-is (i.e. English words)."
OK, good. The German for computer is "der Computer". Great. Now it's just all the other words that aren't technical you need to learn.
in Germany [...] most of the technical terms are used as-is
Yes, indeed. And in sharp contrast to France where they have a government department to come up with 'official' new words, such as ordinateur for computer, réseau for network, etc. Of course, being an official government edict, everyone in France completely ignores it :)
"Yes but English as a second language is a far more valuable commodity for Greeks and Spaniards compared to German, for example. There are far more places that speak English than German."
But a Greek with fluent German will be fine there. There are quite a lot of Greeks who have German language skills. The Greeks were working there well before the EU freedom of movement thing kicked in.
I don't think Spaniards and Greeks are busy comparing the tax regimes with an Excel spreadsheet before they decide upon the most favourable country to go to, they just want a damn job.
Those that speak English better start their job search in the UK and Ireland, those that speak German better start their job search in Germany, Austria, and Switzerland, and any of those countries will probably have better tax regime and/or working conditions than Spain or Greece.
Under "Zero Hour" contracts, an individual is considered as employed by the contract provider, but has no fixed hours of work. Employees under this contract have limited employment rights, often no corporate/employment benefits, and are paid on an hourly or daily basis. The employer is under no obligation to actually provide the employee with ANY paid hours or work, and often the employee is engaged exclusively meaning they can't seek work with another employer when no hours are offered.
So, in summary, be "employed" by a company with no guarantee of pay, hours of work, employed benefits, the right to claim any kind of income support and, often, not be permitted to seek work elsewhere without breaching the contract.
The DWP, by the way, considers this to be "gainful employment" and will/has insisted that those on JSA or DSA be moved into Zero Hours contracts when they are adjudged fit for work.
And we thought "work fare" was bad.
"I wonder of one person having more than one zero-hour contract is regarded as several people in 'employment'?"
Yes it is:
"Employment increased by 1.08m between January to March 2008 and June to August 2014, but only 26,000 were full-time employee roles." http://www.theguardian.com/business/2014/nov/12/one-40-jobs-created-recession-full-time-employee-tuc-employment
Wankers like Tesco will take people on zero hours contracts who can only work set hours; due to kids/other commitments. They will then call them up telling them they need to come in outside those hours and if they don't they'll loose all hours they may have coming up.
While zero hours contracts could be a good thing, they rely on companies being honest and decent, so we're all completly fucked. As my personal oppinion is more and more jobs will be tied to zero hours contracts, I'll be raising my son to work for himself/do whatever he enjoys and forget looking for a career within a company as they just won't exist.
The DWP, by the way, considers this to be "gainful employment" and will/has insisted that those on JSA or DSA be moved into Zero Hours contracts when they are adjudged fit for work.
Simple - start by moving the heads of the DWP, the Minister responsible for DWP and may be even the whole of the cabinet to Zero Hours contracts. And we must not forget the spouses/family members of MPs who work for them That should be fair
>it does fulfill its main purpose of stopping big companies renaming there employees contractors
You mean like Uber?
It would be fairly easy to put a lower limit on employee figures to which this may apply, but that would rather negate all that lobbying by the big boys, wouldn't it?
The the flip side, taxing corporations is basically a pragmatic measure. Going after the big boys is likely to fail but going after the little man will work every time. Also, the country is broke, so the pain is going to arrive sooner or later and we owe a lot more than the Greeks.
Would it be easier just to tax dividends and income at the same rate and ditch IR35?
@P.Lee
"Would it be easier just to tax dividends and income at the same rate and ditch IR35?"
Not everyone who gets income from dividends is a contractor using it to extract money from their company at a lower tax rate.
ANYONE with shares in a company (Depending on the type of share) will receive a dividend.
The thing that you have to remember is dividends are paid from companies profits, which are already taxed at 20% so if my company makes £1000 HMRC get £200 and I get the remainder up until the higher tax band at which point I pay them 25% of my dividend,
So my company gets £1000
HMRC Get £200 from my company
and another £200 from me (25% of 800)
So HMRC effectively get 40% from me (Thats the combined me & my ltd)
Of course this is a massive simplification, but the point that I wanted to get across is that contractors are not the tax evading entities that some permies think we are, we get paid more, but get NO benefits from our clients - no pension, no sick pay, no holidays, no redundancy, no real notice period.
If you look at how much an employee actually costs a company you can see why its cost effective for companies to use contractors to meet short to medium term need...
But it does fulfill its main purpose of stopping big companies renaming there employees contractors and thus oiling their way out of any responsibilities to their workforce.
It doesn't.
A few years ago, I was working for a company with an awful lot of contractors. Some of them had been there continuously for 10 years or more...
Vic.
No they don't.
In the Public Sector there are rules that say if you are in a contract for more than 6 months, paying more than £200 per day then you have to provide evidence to the client that your Tax and NI payments are compliant with IR35, either inside or outside.
If you work in the same general location (whether in the Public or Private sectors) for more than 2 years then you can no-longer claim travel and subsistance costs. Location is very broad, so 12 months with one London Client followed by 18 Months with another London Client would be caught by this rule (30 months in one location). If the commute doesnt fundamentally change (Next Client is in Leeds for example) then the rule applies.
Other than that there are no restrictions on how long you can contract with the same client, nor is length of engagement an indicator of your status under IR35.
Well done on the first half page of this article, which is a clear well written summary of the contractor position and the proposed changes. I'm a contractor, and think the modest tax increase is not unreasonable.
IR35 is a different matter. It is deliberately wooly and a classic piece of FUD. Muddy waters instead of clear rules. I don't mind which way the rules go as long as they are clear. Most contractors become contractors for the independence and extra cash, not the possibility of tax avoidance.
Regarding the Professional Contractors Group, now called the Association of Independent Professionals and the Self-Employed, many contractors believe this organisation no longer serves their interests.
". I'm a contractor, and think the modest tax increase is not unreasonable."
+1
Especially as at the same time they are making life increasingly uncomfortable for scroungers that don't want to work, and those that are unreasonably subsidised by the state by being in social housing when they could afford commercial rents, or have extra rooms that they don't need.
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