Reply to post: Re: @ 2nd AC

UK.gov gears up for IR35 private sector crackdown – say industry folk

Anthony 13

Re: @ 2nd AC

"Although the IR35 is irrelevant to me I still can't help but feel the government wants to big up Crapita and co at the expense of the small guy."

"Because I'm in the lucky position of earning more by working for a boutique consultancy instead. We provide vendor-equivalent services so we get to bill out at 2k per day rather than the 6-800 i used to get"

This, to me, is exactly where IR35 breaks down. I believe contractors operating through a Ltd have a fairly easy time on the tax front (though one can argue the balance of risk vs reward), but why should a single contractor pay more tax than a 'boutique' or large or whatever consultancy doing the exact same thing they are! It will cost the end-client more to bring in a 'consultancy', and HMRC will probably end up with less tax at the end of it. Having worked with both consultancy firms and individual contractors, they are usually treated the same, with the client having a big say in how they operate. So the contractor may be considered in IR35, but the consultancy wouldn't be.

Perhaps one of the answers will be for contractors to frankenstein themselves together into small bogus consultancies. But why should they have to do that? Surely there has to be some tax middle ground...

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