Quote:
Originally Posted by Escapee
I'm sure I will see an increase in my tax today because my main source of work is a contract that has been placed inside IR35.
There are many that are on contracts like myself who pay employer NI and the apprentice levy as well as employer NI, income tax and for umbrella company services. These people are not all well paid, when all the costs are added up some are on similar wages in their pockets to permanent employees, but it looks like they are going to take a hit.
I have just renewed what was my main contract on terms that are a maximum of 3 days a week, there's just no point working 5 days and the extra I inevitably ended up doing on the weekend. I'm now going to stick rigidly to 2.5/3 days per week.
The problem I have been working on as the engineering lead is costing in excess of £1m every working day until there's a fix in place, and it was on hold for 10 weeks while the civil servants got their act together renewing the contract. They introduced a weeks delay while they attempted to cut my day rate by a small percentage. (I just accepted it because we all want to get on with the job)
It means that making it not worth my while to work a full week by double taxing me with IR35 is going to cost the taxpayer a hell of a lot more every day than the extra tax they collect off me.
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In percentage terms, this does not represent the majority of contractors. If they made "similar wages .. to permanent employees", they would not be contractors. They do it because the overall remuneration is better and in most cases, significantly better.