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  1. #1
    DF Jedi DavidF's Avatar
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    Default Freelance workers tax loophole to be closed

    Any of you guys working in construction under umbrella companies had better get talking to your "employers" over the next year....
    Loophole that lets freelance workers offset the cost of their daily lunch and commute against tax to be closed in Budget
    Tax break thought to be worth £400million a year
    Self-employed use umbrella companies to claim for 'subsistence' costs
    Recruitment firms lowering wages for some workers to pocket value of relief

    A tax loophole that lets self-employed workers write off the cost of food and commuting to work each day against their tax is set to be shut in the Budget next month.
    The tax break can be worth thousands of pounds to individuals, experts say, as it allows them to offset the cost of their home-to-work commute and as much as £10 a day for food against their income tax.
    It works by classifying each place they go to work as a temporary work location, rather than as a series of permanent ones.
    Closing the loop: Tax officials say the daily subsistence relief is worth £400million every year to workers.
    +1
    Closing the loop: Tax officials say the daily subsistence relief is worth £400million every year to workers.
    HM Revenue & Customs launched a consultation on closing the loophole in December. Now tax experts expect Chancellor George Osborne to confirm the move in the Budget on March 18.
    The taxman has estimated that there are 150,000 individuals potentially working in this way. The claims made by them for tax relief on their travel and subsistence are said to cost the Exchequer at least £400million per year.

    How does the tax break work?
    The tax rules allows all workers to offset subsistence expenses - such as travel and lunches - against tax if they have to travel to a temporary work location.
    A work location is classed as temporary if the person works there for or no longer than 24 months. The location is not temporary if they work there for the entire length of their employment, even if this if less than 24 months.
    A LOOPHOLE WORTH £1,726 A YEAR - BUT FOR HOW MUCH LONGER?
    Offsetting food and home-to-work travel costs can be worth hundreds or even thousands of pounds a year.
    For example, a contract worker earning £60,000 would normally pay £13,627 pounds in income tax.
    If they drove the UK average 18.6 miles to get to and from work each day, and spent the standard 45p per mile to do it, they would spend £8.37 commuting each day.
    If they worked 10 hours each day they could claim £10 for food.
    Assuming they worked 47 out of 52 weeks each year, they would spend an annual £4,316.95 on food and travel.
    Allowing them to write this off against their tax would lower their income tax bill to £11,900.22 - a saving of £1,726.78.
    This has meant that most temporary or freelance workers cannot normally treat their workplace as 'temporary' for tax purposes, despite being their for typically less than 24 months. Instead they are contracted to work directly for each employer, and their entire employment takes place at that location.
    However, recruitment firms have begun to structure the contracts of temporary workers and freelancers differently so that they can take advantage of the tax break available for temporary work places.
    The recruitment company sets up an umbrella company in order to employ the freelance workers.
    The umbrella company hires the workers on an 'overarching contract of employment', which means it is the umbrella company that is treated as their permanent place of work, with each work assignment treated as a temporary location.
    This means the worker can claim tax relief for the cost of getting to work and food each day.
    Some recruitment firms offer to run umbrella schemes for group of freelance workers in return for an administration fee - typically between £15 and £30 a week for each worker - so that the workers can benefit from the tax relief
    However, some will hire temporary staff on this basis and then lower their pay by the value of the tax relief, meaning it is the recruitment firm and not the worker that benefits from the tax relief. This also means that less income tax and employer National Insurance is paid.
    Why allow umbrella companies at all?
    HMRC acknowledges that umbrella companies can be used legitimately by workers. Traditionally they have been used by skilled workers who source their work from multiple employers.
    The umbrella company enables them to funnel all their affairs, such as tax and invoicing, through one route.
    However, the market for umbrella company services has changed.
    In its consultation on closing the daily subsistence loophole, HMRC said: 'In recent years, the market has expanded and those employed through an umbrella company now may have their work sourced through an employment business and be less skilled in nature.'
    Will the tax break survive the Budget?
    Tim Stovold, tax partner with accountants Kingston Smith, said: 'The consultation is neatly timed before the pre-election Budget Statement, due to be given by the Chancellor on 18 March 2015.
    'I would normally interpret this as meaning that any announced changes in the Budget following the consultation would take effect from 6 April 2015. But the consultation document does say that any changes will “not come into effect until 2016 at the earliest, so there may be a period of grace before the ability for individuals working under overarching contracts to claim these expenses is lost.
    'However, it is almost inevitable that the restriction over the claiming of these reliefs will apply from April 2016 as HMRC perceives this to be an area of abuse of the tax system.

    [Only registered and activated users can see links. ]

    I mentioned this just the other week on here. This is HMRC responding to all these tax avoidance schemes that enable their rich clients to "avoid" millions per year in tax.....HMRC are clamping down on the low to middle earners while doing bugger all to the massive loopholes that exist.
    Vanilla tax avoidance my arse lol. I know guys in construction who literally are being "bullied" into accepting being paid through this system. Personally I would never accept working under the scheme as it really stinks imho. LTD company all the way for proper self employment.......PAYE in the building/construction trades is almost non existent. Building companies hire trades through agencies....who are supposed to take people on as full time employed workers after 13 weeks.....they (employment agencies) get round this by using the above umbrella scheme - often owned by the agency themselves - they then make the worker pay Employers NI and employee's NI and any tax owing.......Finally the worker has to pay say £30 to receive his wages....It really is sick lol. The agencies "encourage" the workers to falsify their genuine expenses so that they can take home something more than min wage......absolutely stinks.

    3 Thanks given to DavidF

    Ashley (22nd February 2015), Bald Bouncer (22nd February 2015), Over Carl (22nd February 2015) 


  2. #2
    DF Super Moderator Over Carl's Avatar
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    Default Re: Freelance workers tax loophole to be closed

    I rememkber using Gabem for a while. Submitting my expenses only meant the tax rate effectively dropped 0.5%.

  3. #3
    DF Jedi blacksheep's Avatar
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    Default Re: Freelance workers tax loophole to be closed

    All depends on loads of things like if you fall within ir35 or not, they're making a lot of noise out of not much really. At least they're working and paying some tax.

  4. #4
    DF PwNagE Geko's Avatar
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    Default Re: Freelance workers tax loophole to be closed

    Most of the staff who have worked for me on my current project for the last 2 years have been using umbrella companies.


    Quote Originally Posted by blacksheep View Post
    At least they're working and paying some tax.

    I don't agree with this. If they work, they should pay the same as the rest of us. I pay over 30k of PAYE each year... ! If they want to work, they should pay a fair rate of tax. If they don't, go on the benefits scheme. It isn't an option for most, as £40 a week doesn't go far.

  5. #5
    DF Jedi hoponbaby's Avatar
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    Default Re: Freelance workers tax loophole to be closed

    Quote Originally Posted by Geko View Post
    Most of the staff who have worked for me on my current project for the last 2 years have been using umbrella companies.

    I don't agree with this. If they work, they should pay the same as the rest of us. I pay over 30k of PAYE each year... ! If they want to work, they should pay a fair rate of tax. If they don't, go on the benefits scheme. It isn't an option for most, as £40 a week doesn't go far.
    Define the rest of us though, an employee being paid 100% paye, a director of their own company being paid minimum salary + dividend, a self employed person?? They can all be doing the same work but would pay vastly different amounts of tax & ni.

    £30k of paye would equate to a salary of just under £89k, with the employers ni on top a total cost of around £100k. Paid through own company (as long as IR35 is avoided) would see an massive increase in net pay, is that morally wrong?

    As for agencies I hate the practices of most of them, have seen some try to force people through their umbrella co's even when they have their own ltd company - there is just no justification apart from being able to screw the additional fees from them.

  6. #6
    DF Super Moderator piggzy's Avatar
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    Default Re: Freelance workers tax loophole to be closed

    Quote Originally Posted by Geko View Post
    Most of the staff who have worked for me on my current project for the last 2 years have been using umbrella companies.





    I don't agree with this. If they work, they should pay the same as the rest of us. I pay over 30k of PAYE each year... ! If they want to work, they should pay a fair rate of tax. If they don't, go on the benefits scheme. It isn't an option for most, as £40 a week doesn't go far.
    Have worked outside of ir35 for many years and have used umbrella companies aswell as my own.
    Disagree with paying the same as PAYE though. When you work this way you DO NOT get sick pay, holiday pay, Employer contributed pensions, healthcare e.t.c among many other perks

  7. #7
    DF PwNagE Geko's Avatar
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    Default Re: Freelance workers tax loophole to be closed

    Quote Originally Posted by hoponbaby View Post
    Define the rest of us though, an employee being paid 100% paye, a director of their own company being paid minimum salary + dividend, a self employed person?? They can all be doing the same work but would pay vastly different amounts of tax & ni.

    £30k of paye would equate to a salary of just under £89k, with the employers ni on top a total cost of around £100k. Paid through own company (as long as IR35 is avoided) would see an massive increase in net pay, is that morally wrong?

    As for agencies I hate the practices of most of them, have seen some try to force people through their umbrella co's even when they have their own ltd company - there is just no justification apart from being able to screw the additional fees from them.

    The majority is who I was referring to. Was that not obvious?


    As for is that morally wrong.... Well... The tax burden is still there, just spread over others. Why shouldn't we all pay a reasonable amount?


    Quote Originally Posted by piggzy View Post
    Have worked outside of ir35 for many years and have used umbrella companies aswell as my own.
    Disagree with paying the same as PAYE though. When you work this way you DO NOT get sick pay, holiday pay, Employer contributed pensions, healthcare e.t.c among many other perks
    Why don't you look for a permanent job? Because paying no tax far outweighs the list above?

  8. #8
    DF Jedi DavidF's Avatar
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    Default Re: Freelance workers tax loophole to be closed

    [QUOTE=piggzy;3791001]Have worked outside of ir35 for many years and have used umbrella companies aswell as my own.
    Disagree with paying the same as PAYE though. When you work this way you DO NOT get sick pay, holiday pay, Employer contributed pensions, healthcare e.t.c among many other perks[/QUOTE]

    THIS !!!
    The "law" regarding agencies was intended to be - "Work at X place for 13 weeks or more" and you are automatically deemed as "employed". So with employment comes PAYE, Employers pension contributions, Sick pay, Holiday pay, Employee rights.....so in effect PAYE is supposed to be the passport to extra benefits.
    I know people who are working as "self employed" who have worked for the same agency....subbying for the same company.....actually working at the same place of work in excess of 2 years and yet they have NO employment rights. They could be fired on Friday with 10 mins notice.....As happens VERY OFTEN in the construction industry. THey have NO Holiday Pay, No Sick pay, No pension contributions from their employer.....Its a one way street.
    I think like Geko in one respect - we should all pay our tax. But I think that this should fall back on employers and the use/regulation of agency workers and temporary workers in general. Try to get a start with Balfors, Skanska, Wates, Kier.......none of them take construction trades on direct.....they simply refuse to do so. These are the biggest players in the UK construction industry, between them they gobble up billions of pounds per year in uk government contracts.....ie tax payer funded projects, and yet they don't want to pay the correct tax or ni for their "employees".....they operate a system where agencies are used to get round employment law.....every change in the law is met with yet another "trick" conjured up between the construction firms themselves and the agencies....
    I know for a fact that one of the big boys operates the following system
    Big company owns an employment agency
    Employment agency is then used to hire "long term" workers with no "rights"
    Employment agency Owns its own payroll/umbrela company -
    The agency refuses employment to any person not wanting to have their wages paid through said payroll/umbrella company
    The worker (The guy at the bottom of the pile who actually does the work) - He has to pay the payrole company £30 per week for processing his/her wages
    The worker pays Employers NI
    The worker pays Employees NI
    The worker pays himself min wage (decided by payrole company he actually has no say)
    The Worker gets some of his wages paid through dividends - again no choice as decided by payrole company
    The worker actually takes home less than if he was PAYE - with the benefit of no employment rights at all

    Now IF a worker in tax law is seen as self employed then he rightly should be able to offset his expenses against his "profit"
    IF the worker is deemed by the tax man as not self employed then it must come back to the workers employer,,,to ensure that the worker is effectively "employed" with all that comes with that.

    At this point in time the big building company pay sod all.....the worker almost has to pay them to work.....Tell me the above is OK....then we can talk lol.
    It absolutely stinks and robs everyone from the tax man to the tax payer and the worker himself.......I know who benefits and the clue is look at the middle and top of the chain.
    I think agencies and more so umbrella companies are leeches and parasites who feed off others work. They serve no real purpose except to screw ordinary people out of a percentage of their earnings.

    3 Thanks given to DavidF

    Ashley (23rd February 2015), Bald Bouncer (23rd February 2015), Geko (23rd February 2015) 


  9. #9
    DF Jedi DavidF's Avatar
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    Default Re: Freelance workers tax loophole to be closed

    Why don't you look for a permanent job? Because paying no tax far outweighs the list above?
    That's pretty poor Geko......I can only assume you have no idea what some industries are like with regards to taking on workers in a "proper" fashion. Most people I know would prefer to have a full time cards in PAYE job. Instead they are forced to fight over the scraps. Its easy to say go get a proper perm job.........what should he do - jack in current one go to job center and then actively refuse ALL the temp work that the job center offers. Sanction city. These guys are suffering mate. I could go on all day about construction (My area).....unless you are experienced in it then you really have no idea of how very poorly construction workers are treated by the companies they work for.

  10. #10
    DF PwNagE Geko's Avatar
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    Default Re: Freelance workers tax loophole to be closed

    Quote Originally Posted by DavidF View Post
    That's pretty poor Geko......I can only assume you have no idea what some industries are like with regards to taking on workers in a "proper" fashion. Most people I know would prefer to have a full time cards in PAYE job. Instead they are forced to fight over the scraps. Its easy to say go get a proper perm job.........what should he do - jack in current one go to job center and then actively refuse ALL the temp work that the job center offers. Sanction city. These guys are suffering mate. I could go on all day about construction (My area).....unless you are experienced in it then you really have no idea of how very poorly construction workers are treated by the companies they work for.
    I don't see this exploitation. You're right I do have no idea.

    I work in construction, but I am a project manager. All I see if people on £1500 a day paying no tax. On a project for 5 years, then onto the next one...!

  11. #11
    DF Jedi DavidF's Avatar
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    Default Re: Freelance workers tax loophole to be closed

    Quote Originally Posted by Geko View Post
    I don't see this exploitation. You're right I do have no idea.

    I work in construction, but I am a project manager. All I see if people on £1500 a day paying no tax. On a project for 5 years, then onto the next one...!
    I can only really speak with full knowledge of the electricians working in construction mate ....Although I KNOW for definite that the same system effects most trades. Now here is an example for a spark.....We are governed by a scheme that is a register of electricians....It sets min standards, min qualifications, wage rates for all operatives within JIB registered firms (Any big construction project requires the use of JIB registered sparks.......)
    So with that background here is a piece that was written about CIS......this was BEFORE the forced use of umbrella companies by the agencies from April last year....it is MUCH worse for the contacting electrician now....Here goes
    Earnings Scenario


    There are two JIB Approved Electricians working alongside each other on a generic site in Central London. One is cards in for a JIB company and the other is an Agency worker paid through CIS.


    They both start work on Jan 1st and finish on 31st Dec.

    The site is 16 miles from both of the Electricians homes and the companies office.

    The company is paying ten hours a day. So both Electricians are to receive 50 hours a week money.


    The earnings for both Electricians for a normal working week


    The CIS - Agency Electrician

    Working 10 hours a day, being paid £15 an hour.

    15 hours x 10 = £150 a day,

    x 5 days = £750 a week

    subtract - £25 ltd company payment fee and 20% CIS tax £145

    = £580 take home for the week



    The Cards In Electrician

    Working 10 hours a day, being paid £16.64 for the first 37.5 hours and £24.96 thereafter.

    7.5 hours x £16.64 = £124.8,
    2.5 hours x £24.96 = £62.40
    £124.80 + £62.40 = £187.20 a days

    x 5 days = £936

    subtract - NI Contributions £81 and Income Tax £175 = £680

    then add the Travel time and Travel allowance of £43.90 a week

    = £723.90 take home a week


    The earnings for both Electricians for the full calender year


    The site shuts down for 2 weeks at Christmas.

    There are 5 other bank holidays.

    Both Electricians have a one week holiday in the summer.

    Adds up to 20 work days or 4 weeks


    The CIS - Agency Electrician

    With a weekly NET income of £750 per week

    52 weeks in a year - Take off the above 4 weeks = 48 weeks

    48 x £750 = £36,000

    + £36,000 - Gross Income

    - £1,200 - Ltd Company fees for 48 weeks at £25 a week

    - £6,960 - 20% CIS tax over 48 weeks

    - £137.80 - Compulsory NI Contributions of £2.65 per week


    £27,702.20 - ACTUAL CIS TAKE HOME



    The Cards In Electrician

    With a weekly NET income of £936 per week

    52 weeks paid as Cards in workers receive holiday pay and paid bank holidays.

    52 x £936 = £48,672

    + £48,672 - Gross Income

    - £9,096 - Income Tax

    - £4,205 - National Insurance Contributions

    +£2,107 - Travel Time and Travel Allowance paid at 48 weeks


    £37,478 - ACTUAL CARDS IN TAKE HOME



    The above calculations do not include any weekend work.

    Generally, as an Agency worker, you are on a bloody good deal to get the weekend paid at time and a half.


    Both Electricians work Sat and Sun and are both paid 10 hours a day.


    The CIS - Agency Electrician

    20 hours paid at £21.50 an hour = £430

    + £430

    - £86 - 20% CIS


    = £344 additional earnings


    The Cards In Electrician

    6 hours paid at time and a half & 14 hours paid at double time

    £24.96 x 6 = £149.76

    £33.28 x 14 = £465.92

    £149.76 + £465.92 = £615.68

    + £615.68

    - £56 NI Contribution

    - £85 - Income Tax

    + £17.56 - Travel Time&Allowance


    = £492.56 additional earnings


    So two everyday Electricians, both JIB Approved card holders with two very different circumstances.All of the above calculations do not take into account the first point made about costs of training, travel etc.


    Add all of that together and in my view, we would all be alot better off on the cards.

    The last and final point that seems to get left behind. Once the entire workforce is on the cards they are in a position of greater strength in wage negotiations, bonus payments etc.

    So if the whole industry was cards in, the rates would not be as stated above or in whichever national agreement rule book you have in your hand. They would be well above and beyond

    I could go on just about ANY online recruitment site right now and show you examples of jobs offering 50+ hours per week at flat rate.....often 70 hours. You could say well if them jobs are not paying the correct rate with proper terms and conditions AS PER our national working rules then one should just take a cards in job with another firm........Apart from maintenance electricians I cant see one today anywhere. Tons of agency work....I could literally work 15 hours a day 7 days a week with this huge upturn that we are all experiencing.....all for flat rate at under our agreed minimum lol.

    Lastly I will say that the fact that initially you said "If they work, they should pay the same as the rest of us." - Shows that even for you (And I feel you have your eye on the ball rather than off the ball) - This sort of headline works and takes your thoughts away from Lord XYZ who pays his tax at about .00000005% and siphons millions away off shore.....Oh well at least he's a wealth creator lol.

    3 Thanks given to DavidF

    Bald Bouncer (23rd February 2015), JonEp (24th February 2015), rmj2663 (23rd February 2015) 


  12. #12
    DF Jedi hoponbaby's Avatar
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    Default Re: Freelance workers tax loophole to be closed

    Your calcs for a CIS subbie through his own company fail to take in to account the amount of actual tax payable - the cis is on account but repayable and replaced by corp tax. Also the £2.65 ni would be for someone self employed (class 2) not ltd co/umbrella. If self employed then the CIS is still only on account and replaced by tax/class 4 ni under self assessment.

    The subbie or agency route is a necessity in the construction industry scheme in reality. Although many firms will employ a central "core" of trades the work is just too variable to be able to employ everyone.

    2 Thanks given to hoponbaby

    DavidF (23rd February 2015), JonEp (24th February 2015) 


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    DF Super Moderator piggzy's Avatar
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    Default Re: Freelance workers tax loophole to be closed

    I do pay tax albeit at a lower overall percentage.

    I have even been working at major corporations (e.g. BT) and have asked to be considered for regular employment without any success.
    I think some companies like the idea of having contract staff on higher risk projects so that if needed they can say goodbye to entire teams at the drop of a hat without tribunals, redundancies, notice periods e.t.c

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    DF Jedi hoponbaby's Avatar
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    Default Re: Freelance workers tax loophole to be closed

    Quote Originally Posted by Geko View Post
    The majority is who I was referring to. Was that not obvious?

    As for is that morally wrong.... Well... The tax burden is still there, just spread over others. Why shouldn't we all pay a reasonable amount?

    Why don't you look for a permanent job? Because paying no tax far outweighs the list above?
    No - as per your previous "Most of the staff who have worked for me on my current project for the last 2 years have been using umbrella companies." One you, multiple staff would suggest that they are the majority.

    Again we're back to the definition of what's reasonable - Mr contractor earning £90k may well be paying over £20k in CT & personal, is that not a reasonable amount??

    Quote Originally Posted by Geko View Post
    I don't see this exploitation. You're right I do have no idea.

    I work in construction, but I am a project manager. All I see if people on £1500 a day paying no tax. On a project for 5 years, then onto the next one...!
    As above they will be paying a substantial amount of tax, they also have the risk of being dumped with no notice, no holiday pay, no sick pay, no pension or other benefits. It's a choice - salary & security or additional income but risk.

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    DF Jedi DavidF's Avatar
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    Default Re: Freelance workers tax loophole to be closed

    Quote Originally Posted by hoponbaby View Post
    No - as per your previous "Most of the staff who have worked for me on my current project for the last 2 years have been using umbrella companies." One you, multiple staff would suggest that they are the majority.

    Again we're back to the definition of what's reasonable - Mr contractor earning £90k may well be paying over £20k in CT & personal, is that not a reasonable amount??



    As above they will be paying a substantial amount of tax, they also have the risk of being dumped with no notice, no holiday pay, no sick pay, no pension or other benefits. It's a choice - salary & security or additional income but risk.
    Here is what is happening in the construction industry - [Only registered and activated users can see links. ]
    That tells it better than I can...suffice to say in construction the subbies re now being paid relatively the same rate as their PAYE cards in colleagues. YES it IS all about the money at the end of the day. Suffice to say that when this legislation really does kick in (from the op) their will be sever unrest in the construction industry.....I wonder how the government will achieve their 200,000 new homes, the HS2 the new round of nuclear power stations...all in the next 5 years or so.
    Again I offer 2nd hand anecdotal evidence - I know very skilled electricians who have left the game entirely to do things like drive taxi's and even one who works behind a bar......top tradesmen who have found that they get more cash for doing unskilled jobs than they do for doing the job of a skilled tradesmen....no pressure on them either. Then you have the more militant type who are up for strikes ect....I agree with their cause.
    The construction industry NEEDS temporary workers.....but they abuse it widely now with 8 agency workers for every 1 PAYE on the cards worker (This is true of the electrical game). But with the lack of security used to mean the worker got remunerated much better than their PAYE counterpart. Now the paye guy laughs at the contractor as they are now the bottom of the pile.

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    DF Jedi DavidF's Avatar
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    Default Re: Freelance workers tax loophole to be closed

    Quote Originally Posted by hoponbaby View Post
    Your calcs for a CIS subbie through his own company fail to take in to account the amount of actual tax payable - the cis is on account but repayable and replaced by corp tax. Also the £2.65 ni would be for someone self employed (class 2) not ltd co/umbrella. If self employed then the CIS is still only on account and replaced by tax/class 4 ni under self assessment.

    The subbie or agency route is a necessity in the construction industry scheme in reality. Although many firms will employ a central "core" of trades the work is just too variable to be able to employ everyone.
    Yeh I was generalising and I knew you would know the exact figures lol. Do you have clients in the construction industry or is that not your field ? Just interested in what feedback your own clients in construction are feeling really. I know everyone moans about cash anyway even when times are good.....but I feel a real unrest these days and guy's are dropping like flies and buggering off to do other stuff....or even go off the radar and pay no tax/ni whatsoever. Are you finding this ?

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    DF Jedi hoponbaby's Avatar
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    Default Re: Freelance workers tax loophole to be closed

    I've got quite a few clients in the construction industry from the companies down to the individual subbies so see it from both sides and across all trades.

    Tbh even in the same sector there is a really large spread, some are just ticking along still others are absolutely flying. Had a few who have left the paid employment to go own ltd route as the money is better - money over security. As for that website above the gov couldn't give a stuff about people being employed to give better terms and conditions, it's all about the employers ni and tax - IR35 was intended to do exactly that (but was just an appalling piece of legislation) which didn't make a jot of difference to employment conditions.

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    Default Re: Freelance workers tax loophole to be closed

    Quote Originally Posted by DavidF View Post

    Lastly I will say that the fact that initially you said "If they work, they should pay the same as the rest of us." - Shows that even for you (And I feel you have your eye on the ball rather than off the ball) - This sort of headline works and takes your thoughts away from Lord XYZ who pays his tax at about .00000005% and siphons millions away off shore.....Oh well at least he's a wealth creator lol.

    The problem was, I was thinking of the "Lord XYZ" type and of those who work alongside me who exploit this to maximise their earnings. I didn't realise they were also using it to minimise payments to their staff.

    As for the "wealth creator" argument. I don't and have never bought that. If Amazon or Starbucks couldn't operate in this country without paying a reasonable rate of tax, someone else would appear in their place who would pay. The pricing wouldn't noticeably change either, so the end customer wouldn't bare the brunt.

    Thanks to Geko

    DavidF (24th February 2015) 


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    DF PwNagE Geko's Avatar
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    Default Re: Freelance workers tax loophole to be closed

    Quote Originally Posted by hoponbaby View Post
    No - as per your previous "Most of the staff who have worked for me on my current project for the last 2 years have been using umbrella companies." One you, multiple staff would suggest that they are the majority.




    This is internet arguing at it's finest. Next time I'll post the whole company hierarchy to ensure clarity.



    Quote Originally Posted by hoponbaby View Post
    Again we're back to the definition of what's reasonable - Mr contractor earning £90k may well be paying over £20k in CT & personal, is that not a reasonable amount??

    As above they will be paying a substantial amount of tax, they also have the risk of being dumped with no notice, no holiday pay, no sick pay, no pension or other benefits. It's a choice - salary & security or additional income but risk.

    Most I know pay less than 10% in tax. If someone is paying 20% (which I think should be a standard rate for all anyway), then I have no issue and agree with the risk vs reward statement above.

    2 Thanks given to Geko

    DavidF (24th February 2015), hoponbaby (24th February 2015) 


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