Reply to post: Re: wtf? gears up for IR35 private sector crackdown – say industry folk

Anonymous Coward
Anonymous Coward

Re: wtf?

"I'm saying that if I'm 'encouraged' to go permie, then HMRC loses out to the tune of over £6k/year, and you say that's an increase to HMRC because the permie job pays less?"

No, that's what you're saying. You're not being encouraged to go permie. You (and I mean the collective "you" of the world of freelance contractors) are being encouraged to not structure your compensation as if you're not a typical employee when you're otherwise very much a typical employee.

The same laws that guarantee Uber drivers and Deliveroo's bike slaves basic employment protections are the same laws that mean someone spending huge portions of their working time doing regular 9-5 work as an integrated part of a team, reporting into a corporate structure and with little or no say over what they're actually doing each day must be compensated as if they're an employee.

Now, I know freelancers get touchy about this (having been one, having worked with many), and they'll trot out all the usual lines about "more risk" and "no sick pay" and "we pay more net tax" but that is _not_ the point. The fact is a huge number of freelance contractors, particularly in IT, behave as direct employees in every respect except in the way they're compensated. It's the last sector where this is routine practise, and it is _solely_ done to lower tax bills.

If you are using your personal limited company (and remember, you are _not_ self employed) solely to limit liability and as a vehicle for your various professional indemnities then more power to you. However I know, you know and we all know that you can get those same protections and freedoms as a freelancer through an agency or through an umbrella. Why don't IT contractors use those mechanisms? Because owning your own employer means you get to dodge NICs.

You don't get to be righteous about this. You get to be angry, certainly, because you're staring down the barrel of a 20% pay cut, but let's not try and pretend this is the government coming for the poor, downtrodden working man when he's taking £700 a day plus expenses, paying himself £12k a year and banking the rest in dividends. If they don't get you with IR35 they'll get you with the employment regs. No sick pay or paid holidays for your full time employee, you say? Well Mr Company Director, step this way.

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