Vlad the Impala
New member
- Jul 16, 2004
- 1,345
Simster said:
So why is the thread called Contracting and Avoiding Tax" ?
Contracting and avoiding tax
- Thread starter Peter
- Start date
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So why is the thread called Contracting and Avoiding Tax" ?
Scoffers
Well-known member
You can never avoid tax as such, it's just that you pay corporation tax instead of income tax (depending on how you decide to operate) It is true to say that you would pay less tax overall, but then you are on your own, and when you go on holiday, you don't earn any money, plus you have to fund your own pension etc.
It's not all as rosey as it seems.
It's not all as rosey as it seems.
Vlad, there is a difference between avoidance and evasion. I'm against anyone cheating the system by fiddling expenses or using income tax allowances of retired members of your extended family and that sort of thing.Vlad the Impala said:
In this case though, Peter is talking about the benefit of being self employed because he's paid what he's worth and gets to take charge of his tax affairs. If you work for a big company, I think you'll find that not only are you likely to be paid less but also that extra profit goes into the pockets of the company who then pay a bunch of costly accountants to minimise the tax it pays even further.
Scoffers
Well-known member
Vlad, I would also not generalise about contractors. As has already been said in this thread, some folks contract because they have no other choice. It's usually circumstances that drive people to contract, rather than for the money. When I used to contract, most people had the impression that contractors were only in it for the money - the truth is, if you are bold enough, and have the right skills, you have much more freedom than salaried employees, and I think that is why contractors have a bad name, it will be that jealousy thing. Lets face it, most people take perm jobs because of the security, and because they don't want to take the risk of going it alone. I went back to a perm job because I wanted to prgress to management, and I took a hefty drop in salary to do so, but now I'm a Director, and I think it's paid off.
Nothing wrong with wacking up expenses at every given oppurtunity, in my eyes it softens the blow that days off / sick etc don't get paid. Easter coming up being another example of 2 days pay lost.
Got a brolly Co with Plan It, they take there little cut but in return ask for no proof of expenses etc etc.
Got a brolly Co with Plan It, they take there little cut but in return ask for no proof of expenses etc etc.
Tom Hark Preston Park
Will Post For Cash
- Jul 6, 2003
- 70,564
I.T. contracting is the cure for the common cold. You suddenly find you don't throw sickies anymore - cos then you don't get paid.
Scoffers
Well-known member
Tom Hark said:
Good point, well made
bhaexpress
New member
brunswick said:contractors pah
i got one working for me....slow, dragging it out, no care for deadlines and £30 an hour out of my budget.
cant wait to sack him
If the guy is that crap why not get rid now ? That's the beauty of employing contractors, no accountability.
Scoffers
Well-known member
brunswick said:contractors pah
i got one working for me....slow, dragging it out, no care for deadlines and £30 an hour out of my budget.
cant wait to sack him
I think you have answered your own point there. If a contractor is no good, you can sack him - you can't say fairer than that (not something you can do as easily with a salaried employee) Just remember, for every dud, there is a gem.
- Thread starter
- #32
Cheers guys.
...oh and Vlad if you're not happy about it why don't you set up youre own company?...best thing I ever did was leave a permanant position in a company to go back to the SAME COMPANY, doing virtually the same thing and getting paid 50% more. I'm a few weeks from getting that Porsche
...oh and Vlad if you're not happy about it why don't you set up youre own company?...best thing I ever did was leave a permanant position in a company to go back to the SAME COMPANY, doing virtually the same thing and getting paid 50% more. I'm a few weeks from getting that Porsche
Scoffers
Well-known member
The closest I ever got to a Porsche was a Vauxhall Calibre (ok, not that far then !), although a new Porsche Garage has opened just around the corner from me, so at least I can look, even if I cannot afford!
Tom Bombadil
Well-known member
Simster said:
All that is happening is that the party who pays er's NI is changing. The cost to the company of employing you (ignoring pensions,biks etc) Is your gross salary plus er's NI. If the company pays you as a contractor they don't pay NI and can pay you abit more. You however have to deduct more out of your gross earnings.
As an employeee I earn less than an equivalent contractor, but I do have the advantage of sick pay, paid holidays and protection against dismissal.
Highfields Seagull
Well-known member
Peter said:I'm a few weeks from getting that Porsche
Dwayne?
bhaexpress
New member
Good point, contractors are highly expendable even when the agency you're working for moves the goal posts. One time I signed a contract but the client kept cahnging the start date as they didn't know what they were doing. A month after the contracted startup date I gave up waiting but lost money as a consequence. Naturally the agency assumed no responsibility thanks to the 'small print'.
bhaexpress
New member
Highfields Seagull said:Dwayne?
I was about to say that too.
And of course what Peter has done is so incredibly different to posting a message informing us all that you have been invited to a private party featuring Girls Aloud and Goldie Lookin' Chain with free booze...Wozza said:Be sure to keep us fully updated.