4 ms·

Could you expand what you mean by this? Able to deduct quite a few things in the US?

by digisign 4y ago

varispeed 4y ago
Here in the UK there is something called IR35 that has recently been changed so that if you run a business your client actually can decide whether you are a business or the so called disguised employee. If they decide the latter, all the money they pay your company, you have to draw as a salary through an intermediary (fee payer) and it means your company gets no profit (so there is no way to deduct any costs). The catch is that if your client don't declare you as a disguised employee, they risk being investigated by HMRC (equivalent of IRS) and getting fined. This has created a chilling effect and basically it's very difficult to find a client that is willing to take the risk. Basically for all intents and purposes you become an employee, but you get no employment benefits and you still have to pay for your own tools etc, but it comes from your salary not from the business. It's like a company required their workers to buy all their equipment from their salary. Madness. edit: So some people try to compensate this by increasing rates and that means their rates become on par with what big consultancies ask. So some bigger clients see this as no longer worth bothering with and they simply get managed teams from big firms rather than taking independents. The guy who pushed these changes in the UK has a wife that owns substantial shares is Infosys ;-) also the biggest consultancies were involved in crafting the legislation...
- bluefirebrand 4y ago
  I'm curious what challenges there would be to form a consulting agency of just one, to basically continue behaving as an independent contractor but have a sort of umbrella "company" that is just you? I imagine it's extra overhead but if it's not too much extra it seems worth it?

4 ms·

Could you expand what you mean by this? Able to deduct quite a few things in the US?

by digisign 4y ago

Could you expand what you mean by this? Able to deduct quite a few things in the US?

varispeed 4y ago
Here in the UK there is something called IR35 that has recently been changed so that if you run a business your client actually can decide whether you are a business or the so called disguised employee. If they decide the latter, all the money they pay your company, you have to draw as a salary through an intermediary (fee payer) and it means your company gets no profit (so there is no way to deduct any costs). The catch is that if your client don't declare you as a disguised employee, they risk being investigated by HMRC (equivalent of IRS) and getting fined. This has created a chilling effect and basically it's very difficult to find a client that is willing to take the risk. Basically for all intents and purposes you become an employee, but you get no employment benefits and you still have to pay for your own tools etc, but it comes from your salary not from the business. It's like a company required their workers to buy all their equipment from their salary. Madness. edit: So some people try to compensate this by increasing rates and that means their rates become on par with what big consultancies ask. So some bigger clients see this as no longer worth bothering with and they simply get managed teams from big firms rather than taking independents. The guy who pushed these changes in the UK has a wife that owns substantial shares is Infosys ;-) also the biggest consultancies were involved in crafting the legislation...
- bluefirebrand 4y ago
  I'm curious what challenges there would be to form a consulting agency of just one, to basically continue behaving as an independent contractor but have a sort of umbrella "company" that is just you? I imagine it's extra overhead but if it's not too much extra it seems worth it?