4 ms·

There are plenty of people working as contractors or freelancers in the UK who are without sin in this respect. Not everyone - or even most people - working ind

There are plenty of people working as contractors or freelancers in the UK who are without sin in this respect. Not everyone - or even most people - working independently is trying to evade tax. In fact financially most people would be better off as employees now if you directly compare salary with contract rates as if they meant the same thing. The big advantages of contracting and freelancing are about flexibility and being able to price on value and not according to whatever trends are happening in the employment market.

varispeed 4y ago
Independent contractors where not doing anything different than larger agencies. Same service, just with more attractive pricing. The difference between a small business and agency is that agency can actually afford to properly avoid paying tax. The taxes have been changed anyway, so the mythical small salary + dividend, does not offer meaningful advantage any more when it comes to tax. The real problem is that IR35 removes profit from the company and the company has no way of offsetting legitimate business costs against tax (like your office, accountant, insurance, tools, software etc.) and you also can't retain part of the invoice and taking lower salary and dividend to have a cushion for the times out of clients or when you want to build capital for a start up idea. It has completely killed entrepreneurship. It means less competition, less jobs and smaller growth of the economy. Not sure how is that a good idea.
- Silhouette 4y ago
  Some "contractors" were definitely disguised employees so I have some limited sympathy with the original intent behind IR35. But the baby was thrown out with the bath water and then they knocked down the bathroom and half of the house for good measure. As you say that has had a devastating effect on the independent and entrepreneurial sectors in several industries including tech.

varispeed 4y ago

Independent contractors where not doing anything different than larger agencies. Same service, just with more attractive pricing. The difference between a small business and agency is that agency can actually afford to properly avoid paying tax. The taxes have been changed anyway, so the mythical small salary + dividend, does not offer meaningful advantage any more when it comes to tax. The real problem is that IR35 removes profit from the company and the company has no way of offsetting legitimate business costs against tax (like your office, accountant, insurance, tools, software etc.) and you also can't retain part of the invoice and taking lower salary and dividend to have a cushion for the times out of clients or when you want to build capital for a start up idea. It has completely killed entrepreneurship. It means less competition, less jobs and smaller growth of the economy. Not sure how is that a good idea.

Silhouette 4y ago
Some "contractors" were definitely disguised employees so I have some limited sympathy with the original intent behind IR35. But the baby was thrown out with the bath water and then they knocked down the bathroom and half of the house for good measure. As you say that has had a devastating effect on the independent and entrepreneurial sectors in several industries including tech.