Reply to post: Re: Left hand, meet right hand... gears up for IR35 private sector crackdown – say industry folk

Anonymous Coward
Anonymous Coward

Re: Left hand, meet right hand...

i pay ~30% of my pre tax wage in taxes.

out of my post tax earnings i have to pay:

travel including car costs, fuel, trains, busses, taxis

lunch, drinks, snacks, entertainment

purchases related to my profession, i.e tech stuff like computers, phones, tablets, internet connection etc.

contractors get to reclaim vat and tax on fuel & get to pay for the above out of pre tax earnings thereby further reducing the taxes paid and making their purchases generally cheaper effectively subsidised by permies who pay full tax.

either pay full tax or pay additional taxes due to benefits in kind gained by purchasing through your business.

if permies and contractors where on an even footing with regards to taxes and expenses no one would begrudge contractors earning more due to short contracts, lack of sick pay, holidays etc.

that £1200 laptop effectively costs me ~£1560 pre tax earnings, the same machine costs a contractor at most £1000 as they can claim vat back and they could also expense the machine against current or future profits, effectively purchased by other tax payers as the cost is offset against less tax paid.

its a fact that contractors pay less in direct and in direct taxes.

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