Interesting reading - I'll be shutting down my Ltd after 23 years in the next few weeks. Like others, my market (Oracle) has basically been killed due to offshoring and IR35 is the final nail in the coffin. A huge OG by HMG as the tax take will be considerably less than they expect. It was fun while it lasted and the only sector within IT that will benefit will be the giant offshoring firms, like Infosys, who the Chancellors father-in-law co-funded. Good luck to all in your future endeavours.
Read an article this week that talked about already 20% of large corp taking their contract resource off shore. They dont want headcount and all the problems that brings for short-term change. So are happier to pay more money for all those jobs to go abroad. Someone will be along to blame Brexit soon
For a big corp it's a no brainer Bradders. No retrospective HMRC investigation to worry about, no headcount, no aggro ... dream ticket.
HMRC have been after the self-employed/one man LTD for 30 years, we are an awkward bunch who contribute a huge amount to the economy but are difficult for a monolithic beast like HMRC to deal with. Wait until MTD gets fully implemented, that will drive even more folk to PAYE, which is exactly what they've always wanted. Brainless.
As said above Govt ministers and their families will benefit everyone else will be worse off. The sooner people stop believing politicians the better. They work to better themselves and fuck everyone else.
§ exactly the same - when you take VAT, corporation tax into account and the VAT I pay from having a bigger disposable income I reckon they stan I claimed my travel expenses when I was a perm, I put my travel expenses through the books in my Ltd - I try not to take the piss, if it isn’t a justifiable business expense then I wont put it through e.g. I had an eye test in December and needed glasses, eye test is permissible, glasses are hard to justify as you tend to need them for non business uses too so that didn’t go through. There might be a ‘bar’ bill going through this month though.. HMRC may have done their sums but which ones did they do and what assumptions did they use to make them? The market has not reacted as expected and this is going to make a big impact - people are choosing to retire or take some time out to sit on the bench I.e. not working and not paying tax - that isn’t good for revenue and it isn’t good for the economy. I might not be representative of the total market but everyone I speak to seems to have the same story - even when factoring a few months out of work , as happens some times, my tax contribution will be significantly lower. Less people using accountants, less insurance being purchased, projects stopping, lower disposable incomes, mental health issues, the knock on impacts are really quite significant - they can’t last forever there has to be a rebound but I would have a small wager that it isn’t going to come out as expected for the 2020 tax haul.
Can’t believe I can actually see any plus point for the cluster fuck that is Brexit but it might actually help as it will make it harder to travel and work with near shore suppliers who i have to say I’ve had really good results with in the past and allowed us to scale quickly. Never had a good experience using large Indian development centres on the other hand- time, cultural differences, high staff turnover just make it very difficult to have full transparency and quality and delivery always suffered in the end.
Chatting to a mate, who works in a consultancy, they are starting to open offices in other countries and recruit UK contract resource to ‘bring back’ to UK. So all revenue and tax collection goes via another country.
I’m aware that might be a potential loop hole in the HMRC guidance i.e. foreign firms can still be engaged if they are using PSCs - I can understand a government that creates a competitive advantage for it’s domestic businesses, and i can understand a government that creates Some attractiveness to foreign companies to come an invest, but i can’t understand a government making it easier for foreign companies to to business than it is for companies domiciled domestically. Madness i tell thee
HMRC have a bigger picture to look at. More and more people were contracting services which should have been covered by contracts of employment. That isn't sustainable. They had to put a brake on it. All they have changed is who the onus to decide is upon and the very fact these large-medium companies are running scared is because they know they were breaking the rules before. Now the financial penalties are on them.
No what they have done is threaten every large corp that they will go after them for millions if they find one error. maybe they should look at the gig economy, not the ‘workers’ but the likes of Uber who don’t (!) employ them. HMRC did a deal, which they refuse to discuss even in FOI request, that means they don’t go after BA for millions in unpaid vat. funny that...
I'm happy to be out of this shi... for the foreseeable. People were taking the mick but this could of been overcome quite easily. Having a sensible wage/dividend split but not making contactors pay employer AND employee NI contributions, etc, etc, ... and as for company motorbikes!!!
Do you work for HMRC ? You imply that there was a 'revenue' gap ? There really wasn't one at all. I look forward to HMRC going after Amazon et al with the same zeal. My own tax contribution will drop by about 80% - I'm going to find myself a nice little 'low' paid job to pass the time. I won't be the only one doing this. Net result - tax take will undoubtedly reduce. I'm lucky that I was about to 'semi-retire' anyway, for others this is their worst nightmare. Add this to the Loan Charge scandal and I cannot think of a more hostile environment to the present one. Meanwhile, our friendly neighbourhood offshoring firms are going to absolutely clean up whilst funneling profits out of the UK and bringing in keen, bright but ultimately useless resources into the UK to displace local talent. This is a spectacularly dumb move at this point in the economic cycle. As for the Politics, it probably doesn't even register as all I did as a Contractor was 'dodge tax' , apparently Idiotic from the Conservative Party. I wonder what other dumb ideas will be revealed in the Budget ?
They are still breaking the rules; if you care to look at the guidance HMRC has set out. The outcome is that there are now people taxed as an employee but who do not get any of the employment benefits or rights of an employee. It is a poorly thought out and poorly costed implementation. House of Lords are starting their review, and apart from Lord Desai 'contribution' - it seems quite considered.
An employee earning £52,000-ish will mean the Treasury receives as much tax and NI as someone running their own business where the company income after expenses is £70,000 and the owner withdraws all the money for himself. As the figures get bigger, the employee starts to pay more tax than the one owner business.
