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Contractors demand a fairer, simpler tax system

Following the hung parliament result from June’s snap election, Theresa May has since formed a government with the DUP.

Whilst the new government’s sights are set on Brexit negotiations and continued cuts to public spending, a survey conducted by Contractor Weekly reveals that, with regards to issues affecting the self-employed workforce, 72% of contractors want a fairer, simpler tax system.

Philip Hammond currently resides in his position as Chancellor, which may be worse for the public sector than the general contracting population if his track record is anything to go by. Whilst George Osborne set the ball rolling for the recent changes to IR35 in the public sector, Philip Hammond saw them through and many contractors continue to speculate over whether the April 2017 rules will be extended to the private sector.

IR35 has long been a cause for concern for limited company contractors, the majority of whom call for it to be abolished, or at the very least simplified. Fingers are crossed for the Matthew Taylor report into employment which is due any time now, and will look to “be recommending changes to the rights of self-employed workers”, to bring some positive change to contractors.

Seb Maley from Qdos Contractor, IR35 experts and contractor insurance specialists, comments:

“It comes of no surprise that contractors are looking for more fairness and simplicity in the tax system. IR35 is now 17 years old and hasn’t kept pace with a changing environment and increasing self-employed workforce. Over the past year in particular, contractors have experienced changes to how IR35 is managed in the public sector, tax hikes, and a government who doesn’t seem to support flexible working, leaving them feeling penalised for taking the risk of running their own businesses.”

By Contractor Weekly

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13 thoughts on “Contractors demand a fairer, simpler tax system”

  1. C

    Amen to the simpler fairer tax system. Schedule D pays no Employers NI but those forced through Ltd cos have to – why???

    Mind you, right now the biggest threat to rates seems to be the zillions of agents who’ve sprung up recently with thick accents on low quality phone lines offering roles at about half the market rate. What’s all that about?

  2. bolshiebastard

    Seriously gemma cakebread got paid for that article!?

    I’ll tell you what contractors want, they want a tax system that isnt going to go back 6 years as a starting point for an investigation of their tax position and likely getting stiffed with a massive bill, penalties and interest.

  3. guy

    The tax system probably never has been intended as a ‘fair’ thing, since tithes, ridge & furrow and way before.

    It’ll be a cold day in hell when the govt makes it (or anything else) fairer, that the govt works in the interest of the electorate is a quaint myth; it’s a personal wallet-stuffing machine.

    • Jack Sorensen

      Brexit is certainly a wallet-stuffing machine for those MP’s who are pushing to bring back power to themselves from Brussels. Power corrupts, more power will corrupt even more. They’ve created nothing but chaos in Westminster during the past year.

  4. John

    The UK risks falling behind internationally if it continues to push IR35.

    In Singapore, contracting rates are double the UK. They have a single tier tax system that means you pay corporation tax (max 17%, although usually closer to 6-8%!) and nothing beyond. There’s no IR35 equivalent- a dollar earned trading as a freelancer, is the same as a dollar earned trading goods.

    Why would I put up with an onerous UK system, when other countries can treat me better for doing the exact same work?

    There’s a pervasive belief in the UK that the money supply is infinite, and business owners automatically have the funds to pay unlimited amounts. The fact is, being in business for yourself means a foregoing employment rights, a safety net, and playing the dual role of both marketing your services, and supplying them. For the potential to higher rewards, we take on a higher risk– that some months may be leaner than others. We underwrite our own futures.

    It makes no sense, therefore, that we’d pay the equivalent of an employee that gets a basket of rights we’re not entitled to, and the comfort of someone else worrying about payroll. That’s the trade-off.

    This government needs to adapt to changing times and recognise that ’employment’ doesn’t mean what it used to. We live in a gig economy now. Remove the IR35 red tape, and let us trade. It’s hard enough doing the work without the government hitting us for every penny!

    • Ed

      Brilliantly said. HMRC/govt should be reading letters like that.

      Also, tradesmen don’t get treated like this. I stay in the same crappy hotels as them at constant cost and now can’t even claim tax back against that following 24 month rule.

      I’ve had long periods out of work, my debts are massive, I feel completely f#cked over by the government.

  5. Bob

    Contracting is being erroded.. DXC (was CSC / HPE) now demand 15 days every 3 months unpaid leave “furlough” together with unpaid christmas and bank holidays. Also it appears companies are opting for specific jobs.. like a plumber and a leaking tap.. in for the job, then out.. no long term projects. Forget the tax, thats the least of your problems.

  6. tony

    Fairer tax system? Certainly. But how can contractors go forward with any certainty when it seems that the word ‘fair’ does not appear to be part of the government’s vocabulary? As they plan to introduce legislation to open up the past twenty years, including closed years, to avoidance scrutiny, how can contractors look forward when financial ruin or hardship may become a reality for many. How many contractors are sleep walking towards 2019?

  7. Big

    Only time it is fair for the government is if they take all your money and no questions asked about how they spend it.

    Politicians are drunk with power. When is the £1bn to DUP not a bribe? When the government does it.

    Democracy is corrupted when you give votes to people who take out more than they give in. When is giving a vote to someone on how to spend someone else’s money fair? Fairness, we tax payers can only dream

  8. Andrew Harrison

    Fair – yes, I am ok with that. Contractors at risk of gaps in work? – I think that now applies to “permies” as well. My impression backed up by occassional sight of statistics is that there is an overall skewing of the wealth of society towards those with snouts in the trough at the top. Tax, NI, benefits, security, pay rates, pensions, skills, knowledge, capital, effort, risk – very hard to define fair across all of that but more obvious is to spot the people opening up a gap at the top and those falling off the bottom.

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