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Hi All,
My flatmate last night came in from work and told me of a change that is in the offing in the UK regarding a change to the UK's tax laws and contractors, a contract can only last a max of 3 Months any longer and you will be considered a PAYE permie. Having done a contract I can say it took me a month to get settled with the way they work... I can see that could cause problems. Anybody heard this as well? 
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There were reports in the Daily Fail at the weekend that Osborne is planning to introduce this in his November budget and, worse news for you, that it's 1 month before you are considered PAYE.
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I believe (not certain though) that the changes are more to do with not being able to claim transport as an expense, and getting somewhat less tax relief.
I believe it is already tax avoidance to effectively work as an employee while paying tax as a contractor - it's just that there isn't a definitive description of what that means.
PooperPig - Coming Soon
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Oh joy the Daily Fail, I hope this is like most big scoops the mail has...
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I've never heard of a personal service company, does he mean an umbrella company? If so not many contractors use those, and anyway;
Quote: staff.
A contractor who uses an agency to find work with a range of IT firms for short periods will still be able to classify themselves as a personal service company
It seems to be aimed more at the likes of "BBC staff" who can be pretty much considered employees but work non-PAYE. Contractors rarely do this though, I know some contractors do end up in long-term contracts and I think it's fair enough to start to class those people as perms and there are already expense-related timeframes after which you can no longer claim.
Most contractors work via their own Ltd company, and if someone working long-term at the same organisation via a Ltd company is a perm then....what does that make MPs? You think MPs are on PAYE? MPs lease their services to the government via their own Ltd companies and they are no less employees of the government than presenters are employees of the BBC.
Further more, what are the employment law issues here? Another advantage of contracting is that there is no employment law between you and the firm you provide services for. This gives firms greater freedom to get rid of bad workers, or to just get rid of people they no longer need. If contractors are classed as perms then they should get perm legal rights too, and bad ones will then become overpaid and unsackable.
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The issue is contractors who only work for one company, 5 days a week, office hours and are obviously avoiding paying tax by paying company tax not PAYE
The company can pay them higher rates to compensate for their poorer conditions (no leave, sick leave, health insurance whatever) - but the *taxpayer* should have to compensate them for that!
PooperPig - Coming Soon
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You are still subject to income tax when you submit your tax return in addition to the corporation tax you need to pay, the two lots of NI you pay also. Contracting isn't *that* "tax efficient". No paid holiday, no sick pay, and many contractors have high costs associated with what they do (eg working away from home, a lot of travel etc) so why should they have to pay extortionate amounts of tax on that income when it doesn't touch their pockets? As a real-world example I currently pay £800 a month just to execute my current contract...ultimately my client really pays for that, I don't see that money, so why should I be taxed on it? If I was PAYE my rate would just have to go up. If contractors had to go on PAYE then the rates would just soar *shrug* and who is that going to help? The government in the short term, but in the long term it will badly affect business (and therefore government) as firms won't have access to the resources they need at rates they can afford.
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F-ES Sitecore wrote: many contractors have high costs associated with what they do (eg working away from home, a lot of travel etc) so why should they have to pay extortionate amounts of tax on that income when it doesn't touch their pockets?
They shouldn't. Which is why you can claim cost of doing business against your tax. But many, many contractors are employed as sole traders, one-man or umbrella companies with the sole purpose of avoiding paying tax. It costs the employer almost the same to employ a contractor as a permanent staff member - just harder to get rid of them when they need to!
F-ES Sitecore wrote: As a real-world example I currently pay £800 a month just to execute my current contract...ultimately my client really pays for that, I don't see that money, so why should I be taxed on it?
Sh*t - $800 a month? You probably pay that in train fare to commute to a big city these days! But permanent employee commuters pay that! How come you don't see that money? Surely you pay it out of your contract pay?
And probably you "pay yourself" significantly less than your 'salary' out of your company? (I'm assuming here you're a one-man company)
Again, I agree if you want the same take-home and had to go PAYE then the rate would go up - which means the company and not the government (aka ME) are footing the bill for your lifestyle choice!
F-ES Sitecore wrote: and who is that going to help? The government in the short term
How so?
PooperPig - Coming Soon
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_Maxxx_ wrote: $800 a month? You probably pay that in train fare to commute to a big city these days!
Not $800, £800 - British pounds, which is 1,700 dollars to you  Yes, that's how much I pay in travel and accommodation per month in order to do my current job. If I was perm I'd simply get a job closer to home where I wouldn't have these costs, but being able to get tax relief on them makes it possible for me to provide services to a company that would not normally have access to them. In the UK places like London where commuting is more popular pay higher wages that helps offset the costs of travel.
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'personal service company' I was a bit lost on that, I did use an Umbrella for the contract I did (before the PUB), I was being told I should use my own Limited company...
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glennPattonBackInThePUB wrote: 'personal service company'
I would expect them to advertise in telephone boxes.
Some men are born mediocre, some men achieve mediocrity, and some men have mediocrity thrust upon them.
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Nudge nudge, Wink Wink 
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Just break and renew the 'contract' every 3 months.
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Why do I think this is like IR35 trying to get at high earners that hide behind Contracts to get a tax break (BBC), I am pretty sure they would have would have covered that!
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There many ways to get round this change of law.
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Spend 2 hours to automate a task that would take 1 hour doing manually.
But I think it's justified because I avoid the risk that someone will mess up because the task was boring and repetitive.
If you are lucky you get to spend 1 hour to automate a task that would otherwise take 2 hours.
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If it's a recurring task, and you automate it in double the time it would take to do it once.. that's an achievement.
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"Why Program by Hand in Five Days what You Can Spend Five Years of Your Life Automating?"
--Terence Parr
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In defence of this approach, I once spent a week writing a program to match up entries from the audit trails of three separate systems. To do this 'by hand' took maybe half an hours for a set of data.
We had over 5,000 unique datasets to be checked. And all the anomalies were logged to a file for some poor git* to check.
* Me
veni bibi saltavi
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Member 11683251 wrote: I avoid the risk that someone will mess up because the task was boring and repetitive.
But not the risk that the program introduces an error which everyone fails to notice until it's cost the company half its revenue and started three wars?
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Obligatory XKCD[^].
"These people looked deep within my soul and assigned me a number based on the order in which I joined."
- Homer
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Got bored of trying to draw things with weird characters, tried to do something a little more interesting, didn't really pull it off, but have this anyway.
Swindon Ilford Glasgow Leicester Sheffield (8 characters)
OR
Swindon Ilford Gloucester East London Sheffield (8 characters)
OR
Swindon Ilford Glasgow Liverpool East London Sheffield (8 characters)
Clue 1. What does a Hungarian use to light his hovercraft?
Clue 2. I'll admit the clue is UK-centric, but I'm sure someone should be able to deliver the answer.
Clue 3. You want that long, wriggling thing, then your gonna have to thrust something tasty into it's concealed places
Some men are born mediocre, some men achieve mediocrity, and some men have mediocrity thrust upon them.
modified 11-Nov-15 6:34am.
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If the answer should be HELLHOLE then you forgot Luton! 
Bad command or file name. Bad, bad command! Sit! Stay! Staaaay...
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Your facetious response earns you 2W (meeting obviously shorter than intended)
Some men are born mediocre, some men achieve mediocrity, and some men have mediocrity thrust upon them.
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