• New Patreon Tier and Early Access Content available. If you would like to support AVForums, we now have a new Patreon Tier which gives you access to selected news, reviews and articles before they are available to the public. Read more.

Osborne to close loophole for contractors

cabanatuan

Banned

cabanatuan

Banned
Sounds like a damn shame
your a contractor yourself innit?

This is shocking.

People moan on how us contractors pay less NI but truth be told, we dont get no benefits like perms do, plus we have this little thing called a corporation tax that we have to pay thats higher then any tax a permy pays!
 

imightbewrong

Distinguished Member
your a contractor yourself innit?

Yep - back in the day. Now just living off the spoils :p (p.s. - innit?!)

People moan on how us contractors pay less NI but truth be told, we dont get no benefits like perms do,


Not sure what you mean by 'no benefits' - many of them are available to contractors in terms of tax breaks etc.

plus we have this little thing called a corporation tax that we have to pay thats higher then any tax a permy pays!

Literally no clue how you work this out. When I switched to contracting my headline income over doubled, and my 'tax bill' reduced - win/win. Maybe you need a better accountant :p Or is it just classic 'cabananomics'? :)
 

BB3Lions

Distinguished Member
" A contractor who uses an agency to find work with a range of IT firms for short periods will still be able to classify themselves as a personal service company. But a middle-manager brought in to do maternity leave cover at a firm will in future have to go on the firm’s payroll. The new rules will apply to both private firms and the public sector, where there have been numerous examples of senior staff paid ‘off the books’ in recent years"
 

cabanatuan

Banned
" A contractor who uses an agency to find work with a range of IT firms for short periods will still be able to classify themselves as a personal service company. But a middle-manager brought in to do maternity leave cover at a firm will in future have to go on the firm’s payroll. The new rules will apply to both private firms and the public sector, where there have been numerous examples of senior staff paid ‘off the books’ in recent years"
so does that mean that if you apply via a recruiter, nothing changes, you can work more then a month as a contractor?
 

cabanatuan

Banned
There are many projects where it requires contractors to work for 6/12 months and be done with the project in itself for whatever reason.

For an employee to employee perms to work on a project and then sack them after the project is done is going to cost the employer a lot of ££ and grief.

expect lots of permies to be sacked quite frequent now especially in my industry(mobile software development) where a typical client has budget to make some mobile app and be done with it.
 

xar

Well-known Member
You don't need to go permie, but you do need to 'go on payroll' which means paid PAYE. Possible outcomes are:

- day rates remain, but you have to be paid PAYE, either by the end client (seems unlikely), the recruiter (possible as this is not uncommon) or prove to either of those two that you are PAYE via an umbrella I.e. The point of IR35 they keep failing to implement (most likely but the onus is on the 'employer' to prove it is accurate so may be tricky)
- day rates disappear and are replaced with an 'employed consultant' type role paid by fixed term contract (I.e. You are a perm on a temp contract getting paid an equivalent perm salary)

Option 2 being touted as highly possible With cries of 'this would destroy the contract market', however this would save employers £££ as the day rate would drop so I am not sure they would agree. In addition, if perm roles don't start magically appearing contractors will have no choice but to accept it.

interesting use of 'contractor bashing' in the articles though. 'Closing loopholes' and the likes. Fact is it seems that if you aren't a single contractor setup its not actually loophole but a normal and actively encouraged business model. It's only a loophole if HMRC want more money out of you.

For reference I have been a contractor my whole career from leaving uni after the dotcom bubble crashed and all the graduate placements disappeared overnight.

The interesting observation from several perm employees I am friendly with is that this would cripple them as they would have to start using consultants instead at much higher rates and often lower quality (and guess who have been made exempt from the proposed travel and subsustence changes and are huge Tory supporters - any big 4 consultancy you like...)
 

The latest video from AVForums

Fidelity in Motion's David Mackenzie talks about his work on disc encoding & the future of Blu-ray
Subscribe to our YouTube channel

Full fat HDMI teeshirts

Support AVForums with Patreon

Top Bottom