Vote for sale
So, CF is very susceptible to the various promises trotted out by desperate politicos at this stage of the game.
And there's one that caught his eye today.
As a freelancer / contractor / one man band, CF has long suffered from the pernicious feast of arse known as IR35.
Put simply, this is the nasty little rule that says that even if you go to the cost and the trouble of setting up a Limited Company, paying an accountant, paying both sides (employer and employee) of National Insurance and a host of other tedious stealth taxes, the taxman can still - at a whim - decide that you're not really self-employed after all.
That's right. He can decide, unilaterally, that the months you spent working on a fixed term contract, for an hourly rate, paid by the client to your company, were actually not that at all. No. You were working for the client as an employee.
And those fees, that only got paid for the days you worked, and not for illness or holiday, and that cover all the running costs of your company? That was your salary. All of it. And now you owe PAYE and NI on it. Yeah.
He can also, the bastard, apply this retrospectively, and make you pay a shitload of back taxes. And there's fuck all you can do, other than pay hefty insurance premiums in case it happens to you.
Well, that might be about to change, if eeevil Tory Shadow Business Minister Mark Prisk is to be believed (if). He tells us:
"For the last 13 years, Labour have constantly meddled with the tax rules for freelancers and self-employed. IR35 has especially proved to over-complex, uncertain and often unfair"
"IR35 has cost business £73 million over 10 years but it has barely raised revenue for the Treasury.
"This is why a Conservative Government would mandate the independent Office of Tax Simplification to undertake a fundamental review of current arrangements with the aim of providing a clearer, lasting and fairer tax regime""
Yeah! You hear that?
Fuck all that 'rebuilding a better nation', 'a future fairer for all' bollocks - this shit could hit CF in the pocket, but in a good and bulging way.
Keep it up, boys, and you might get one more self-interested vote.
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18 comments:
I suppose you've demanded to know how mant self-employed contractors HMRC use/employ under your FOI rights?
Mr CF I thought I should point out that the Lib Dems have been trying to get rid of this evil IR35 http://www.bytestart.co.uk/content/contractors/ir35/ir35-early-day-motion.shtml It blites my bothers life who I do the accounts for.
I don't think CMD is actually going to do this, though. He's going to look at it.
And then he's going to say: "Uh-huh."
The useless cockwomble.
On the iPhone now. Expect huge rant tomorrow.
Actually, I completely agree with binning the IR35. You're not the only one who's been threatened by that one. And there's also a flip side to the coin. There are growing numbers of so-called self-employed people working from home in very low-level jobs who are actually probably piece workers and should be employees, with the attendant holidays and general worker rights. They're working for minimum wage without even qualifying for Job Seekers Allowance when they're binned with no notice. They've definitely beefed up the wrong side of the legislation with IR35. My God! I support a mainstream party policy. Well, I'll go to the foot of our stairs.
Yes, IR35 - know what you mean CF - I had IR35 implemented half way through a contract in 2001(?) and automatically was placed under IR35via the agency's T&Cs but in retrospect, more through my ignorance than anything.
Since then I am multi-client, true B2B so never worried about IR35 but I wrote an email to Phil Hammond way back and he mentioned that Mark Prisk (former contractor) was fighting it, even back then.
My own thoughts anyway was that IR35 was a voluntary tax and the vast majority paid it regardless through fear or ignorance.
I don't mean this in a "I'm alright Jack" sense, I really don't. But there are too many people once again just simply accepting another tax without investigating changes of contract conditions and working practices.
I know several people that still pay it, even now, and they have paid the equivalent of 16% of their turnover in tax to HMRC for 8 years now.
That's alot of cash.
Hey, CF. I think you held back, there...
One thing you missed is that, having been retrospectively deemed an employee of the client, you don't get the benefits like pension, holiday pay etc. for which you are now paying tax. Double whammy...
Also, because of all this uncertainty, rather than continue to use us as highly-skilled specialists, clients tended to go to bigger organisations who could protect them from this shit by charging a higher rate, and paying the poor sap doing the work next to fuck all.
I dumped something like this into Guido's blog earlier today:
Most freelancers work through agencies. Under employment law, they are OBLIGED to form a limited company as a consequence.
As has been pointed out, such people incur all the costs of running that company, and as well as receiving no paid holiday, benefits, pensions, etc., and are obliged to pay both employee’s and employer’s NI on their salary.
IR35 only allowed 5% of income (not profit) to be allowed as “tax-free”, everything else was taxed as if it were the freelancer’s personal income, and extra running costs, like the office, stationary, advertising, web site, etc., was paid out of income already taxed at around 64%. This was discriminatory, probably illegal and grossly unfair. It also made small companies completely unable to compete with larger ones on a level playing field.
Still, it made Socialists with envy in their veins feel warm and fuzzy because someone successful was being screwed down.
I stopped freelancing in April 2000 after 21 years as an independent consultant because not only did I refuse to submit to this disgusting tax, but I couldn’t have afforded to live. The IT world is poorer for the thousands like me, with years of experience, who suddenly left the market.
A consequence of that is the hordes of Indians we now have, screwing up everything they touch, driving down rates, and swamping the market denying local consultants a living.
I met Mark Prisk personally at a very small meeting discussing small business needs, and he told me that the Conservatives were determined to remove IR35. I believe him.
It was Dawn Primarola wot did it - target her!
One step forward for the Conservatives then?
Oh! But then they take two steps backwards....
David Cameron has said that a Conservative government would train a 5,000-strong "neighbourhood army" to set up community groups. The Tory leader said in a speech this offered a "positive alternative to Labour's big government" approach.
"Our aim is for every adult citizen to be an active member of an active neighbourhood group," he said...
Jeeze!
Having been self employed most of my working life I understand a thing or two about this rule that was brought in about what constitutes self-employment and what does not. In fact IR35 (funnily enough I did not know it was called that, so perhaps I am no expert after all) was brought in to stop the abuse of the system whereby employers were circumventing their obligation under employment tax law I did not like it but all the same it seemed fair. Having not been employed in the UK for the last 6 years I do not know if it has now endured the same fate as most of Labour's laws that of system creep whereby it is now used as a catch all and not for it's intended original purpose. If it has then that is shameful if not then I still think it is fair.
I did not like it but all the same it seemed fair
Oh yeah, do IT employees of big Labour-friendly consultancies pay for their training, computers, tech equpiment, broadband, travel, over-night expenses, and their offices? Get real - it's all expensed for them.
I don't think CMD is actually going to do this, though. He's going to look at it.
Yep - he simply wants power, he's not going to change anything; unless the big three get a kicking we're in trouble. [head-desk] What am I saying? We're in fucking trouble now, and for the rest of my life.
It was Dawn Primarola wot did it - target her
Gordon Brown was head of the Treasury when IR35 implemented and pushed, so it's his snot-covered fingers that were in charge of this fuckup.
Oops, memory-flash to gold-sell-off, VAT-carousel-fraud, tax-credits fuck-up, ak..ak..eternal-loop..ak..ak..eternal-loop...
Buy my Vote. £10 ono, ref gh7547y3, no time wasters or cheques.
IIRC the pernicious scumfuckery unpopularly known as IR35 was brought in primarily for the IT industry because of two factors. The first was jealousy by the troughers, because the eeeeevil IT cuntsultants were earning more than they, and getting better expenses packages. This is true, it is not a 1/4 fule. The second reason was that the eeeeevil cuntsultants were going "down" leaving big bills (i.e. trough tax) unpaid.
IR35 and the associated BERR bollocks about directors becoming responsible for the company's debts meant that the scumsuckers could easily make sure they got what they laughingly deem to be theirs, and additionally the one-eyed fucker also decreed that the body PAYING the busted cuntsultant would be liable for his tax as if he had worked "direct".
My take on this is that if someone is in a position whereby, through obeying the law, they are doing what they want to do, and not bothering anyone else, then the "state" has no right to change that in midstream. In some cases, it meant a drastic reduction in their income which with the knock on effects of shite like stamp duty (because they couldn't afford their mortgage any more) made them skint.
This is wrong, in all cases. The government's responsibility is to run with the income they have. If it isn't enough, they need to cut something or spend more wisely or both, not ask for more. We can't, so they can't.
QED. Any arguments? Oh, I do so hope there are. I'm in the mood for fuckwits today.
"QED. Any arguments? Oh, I do so hope there are. I'm in the mood for fuckwits today..."
Urmmmmm...
Oh look! A tumble-weed.
;-)
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