Outside of IR35 CT is payable on profits after expenses such as mileage, accommodation etc are deducted. Within IR35 those expenses are not allowable and therefore that proportion of income that was previously untaxed would be taxed.
i.e at present I'm outside IR35 in the public sector and legitimately draw about £500 a month in mileage from my company That £500 is not subject to CT. Under IR35 the £500 would be treated as salary and subject to income tax and NI. Same would apply were I stopping in hotels and paying for those out of the day rate.
I believe that that is where some, if not all, of the additional % comes from.
Biting the hand that feeds IT
