IT contracting

[BullDog]

Put another way maybe - if Ltd Cos are no longer really a benefit why would anybody now use one for contracting?didds

I still use one, for my part time work with a local software company. Tax wise I am better off and so are they. Am I missing something?

I do wonder why the gov went through the hassle of ir35 when they could simply have started taxing dividends at 20% (outside an ISA) and solved the problem as a stroke.

Because of the other payroll taxes such as employers and emlloyees national insurance the apprenticeship levy and national insurance at the reduced rate for higher rate tax payers. None of those would be paid on dividend income.

But instead, we have 25% corporation tax, a virtually abolished tax free dividend allowance plus swingeing dividend tax rates on money that's already had corporate tax levied.

[BullDog]

I still use one, for my part time work with a local software company. Tax wise I am better off and so are they. Am I missing something?

I do wonder why the gov went through the hassle of ir35 when they could simply have started taxing dividends at 20% (outside an ISA) and solved the problem as a stroke.

my query was on the premise of

So given that above... is it still the case that in effect Ltd Cos are still in reality required to create the clear "split" from the worker being employed by the client and themselves/someone else... CF self-employment versus payrolled worker ? Because AIUI way back when this was a "required status" for contractors. this was so that clients weren't deemed to be employers with employers NICs and PAYE responsibilities etc.

ie if that is no longer the case then the ltd company may no longer be necessary - undoutedly there may still be benefots, but only if the ltd company can AND THEIR CLIENTS can avoid IR35

WRT your second point - You'd have to ask Gordon Brown.

The majority of contracts are now inside IR35 since fairly recent reforms to how IR35 status is decided. So the majority of people who once worked through Ltd Co's are now employed on umbrella company payrolls. Effectively, the majority of contract workers are now short term employees of umbrella companies without the benefit of (most) employment rights. A lot of people, including myself gave up on contracting and moved on to fields anew. It's all basically a mess.

[StepOne]

The majority of contracts are now inside IR35 since fairly recent reforms to how IR35 status is decided. So the majority of people who once worked through Ltd Co's are now employed on umbrella company payrolls. Effectively, the majority of contract workers are now short term employees of umbrella companies without the benefit of (most) employment rights. A lot of people, including myself gave up on contracting and moved on to fields anew. It's all basically a mess.

I did have a previous contract a few years back with a large company where they said all contractors were going to have to go through an umbrella and be subject to IR35, but all that happened was everyone put their day rates up to (almost) compensate.

Anyway, I've got my eye on retirement at this point. I'm going to continue going through a limited company, outside IR35 , and if that changes I'll probably just jack it all in.

Cheers
StepOne

[scrumpyjack]

The other point about a limited company is that it has Limited Liability, so if you totally screw up and get sued, it is the company they have to sue and you don't go bankrupt!