Reply to post: Re: Well, duh .. gears up for IR35 private sector crackdown – say industry folk


Re: Well, duh ..

That may be true but there is still the matter of the 11 % NI contribution that is payable on salary, by the employee. This affects most middle income workers, the very well paid can treat it as a smaller hit since it stops being applied at around 45k.

To most people it changes the basic rate to 31% for a goodly chunk of their income. Contractors basically save 'tax' by saving on NI contributions.

Which seems fair since they get no sick pay, including statutory; no Maternity leave, no Paternity leave and so on. Until the pension changes were made, they also did not pay into the 'system' and so got nothing in return from that system.

Contractors can earn a lot of money when all is going well, and this is why many do it. It is, however, not always an easy gig, involving travel, living away form home for long periods etc. Often the actual work is the scut work, with permie staff getting (quite correctly) the design and architect elements of the project etc.

I have also noticed that contract rates have not risen a great deal of late where permie salaries do have appeared to.

Everyone gets a choice though, if you think contracting is easy and well paid, become one, if you think permies get a cushy deal, become one - our industry is pretty flexible and opportunities allow most to choose which to be.

I for one think it is time to stop and live on less, the tax rate changes made to dividends not that long ago basically pushed me to early retirement.

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