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What do we want? A proper review of IR35! When do we want it? Last year! Bunch of IT contractors protest outside UK Parliament

batfink Silver badge

According to recent court cases, BBC presenters were actually told by the BBC to form companies to be paid through, rather than going onto the books. The direction was explicit.

I don't see where the "20% pay cut" comment is coming from, unless there's some dodgy play going on. Contractors get to pay Corp tax (19%) off the top, then any dividends are taxed at 7.5/32.5% dividend tax. Against this, they're (mostly) avoiding ~14% Employers NI + (probably) 4-8% Employee's NI, + marginal rates.

Yes, writing stuff off against the company profits helps. Yes, you can leave profits in the company, but that mainly postpones the problem unless you're close to retirement.

So, can somebody enlighten me on where this 20% comes from? I'm permie at the moment but there's always the possibility of going back to contracting, so it might become pertinent.

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