However, if it would be legal and get through an investigation then it is open to abuse by all company owners/directors, not just contractors. If that's the case, changing rules for contractors only may reduce the scale but would leave other business owners able to abuse the the system. This is not making the system fairer, it's making it less fair.
Your problem here is that most FTE butchers, bakers, and candlestick makers aren't paying volumes of the taxes that their self employed counterparts are for sitting at the same desk... IT FTEs are, and IT contractors stand out like a sore thumb in the self employed stakes.
Fair isn't a useful term to define anything - your definition of fair and mine and everyone reading this will be different, and life is rarely fair anyway.
On top of that, it penalises those of us who are not abusing the system.
Low speed limits penalise those of us who really are good drivers and safe at far higher speeds. That, unfortunately, is just how life is.
A fairer way would be to change the rules to stop the abuse. Specifically prohibit the abuses mentioned. The fact that they don't makes it seem like they are keeping the loopholes open for their mates, while closing them for the little guys who don't have the resources to fight them. One rule for them, another for us.
Taking home 6 figures does not a little guy make. Sorry.
They've tried to close the loopholes, these changes are just the latest step in that. Contractors keep finding new ways to avoid them, so this change brings in what amounts to a general anti avoidance principle. By putting the risk on the large employers, they stop having so many freelancers and recruit FTEs who pay taxes instead.
My northern ex-finance mate used to work with someone who had contracted for the same company for 18 years. He'd been there longer than the longest serving FTE by some distance. Those that genuinely move by choice every 6 months or so may get caught up because of people like that, but the alternative is massive eye watering spending cuts - higher rate PAYE has topped out and the only way to get more revenue from it is to recognise those avoiding it via structuring, AKA contractors.
They pay similar levels of tax to an employee who pulls a salary similar to what they take from their company. I discuss these matters with most contractors I come across, and find it hard to believe that I would not have come across any who behave as you describe if it is as prevalent as you say.
The same can be said of the kind of contractor you meet. I'll feel fairly secure stating I've employed a lot more contractors than you have over the past 25 years, and I've worked with hundreds maybe even 1000 of them. I've never met a one that was paying as much tax as the FTE next to them, and that on a 50% uplift in gross.
Biting the hand that feeds IT
