For pity's sake! This isn't about contractors trying to pay less tax. I pay Income Tax, Employee NI, Dividend Tax, and Corporation Tax, and I collect VAT for the Treasury.
I run a one-man PSC. I create software test frameworks for a specific project, train the testers on how to write the tests for it, then I leave. I'm typically in a company for three months, four at most. I have also been asked to come back to a previous company to make modifications and enhancements to the framework, or to train others. It makes zero sense for me to be a permanent employee.
The company would have to set up a pension, health insurance and other benefits for someone who's only going to be there a few months. I'd have three new pensions every year which would almost immediately go into Paid-Up status. This is not of financial benefit to the company or to me.
By claiming that "IT contractors" are avoiding tax, you're showing an abject lack of knowledge on this issue. If anything, it's the companies we contract to who are avoiding tax as they don't have to pay the 13.8% Employer's NI.
IR35 gives contractors no rights, no benefits of being a permanent employee, and makes us pay EmployeR's NI and the Apprentice Levy. How is that even remotely fair on us?
If you think everyone should be working under PAYE, then watch as thousands of accountants, recruitment agencies, insurers, B&Bs, hotels etc. go out of business.
There is an easy fix for this mess: ditch IR35 and implement a hirer's tax, paid by the company for every contractor they hire. Simple.
Biting the hand that feeds IT
