Contractor's sums say IR35 will lose UK plc more tax than it raises
"...as it doesn't target big or small companies..."
And there is your flaw. This government is not interested in making things fair across the board for both large and small businesses. They want to avoid ANY conflict at ALL costs with BIG business.
To do any different could jeopardise the 'campaign funds' to which they have become accustomed. It is NL's perception that we offer them nothing - which I suppose we don't - in the (il)legal sense. As individuals we cannot afford to 'give so generously - for no return' as our larger counterparts. And speaking personally for myself, I already have a British Passport :¬)).
What rankles though, is that I (and 99.99% of everyone else who supports this site) PAY MORE TAX NOW THAN WHAT I EVER WOULD BEING A PERMANENT EMPLOYEE - AND THAT'S THE BOTTOM LINE!
Where is this miracle tax saving coming from? 90 million, 100 million is that it?
1. It will cost far more in the long run to even implement the new legislation. The IR civil servants are not looking forward to all of the extra work - although this is going to be handled by the existing workforce. YEAH, RIGHT, and the dome didn't go over budget, the Pope's a Hindu, etc.
2. If 100,000 contractors are to be affected (or thereabouts) and the return is (allegedly) £100,000,000 then that equates to £1,000 saving per contractor. But... if 1% of the contractors decide to leave (it may be more, it may be less, who knows), then they will effectively generate no tax for the UK plc. From my own experience, if I move back into a permanent role, I will be in the higher end tax bracket. I know from simple sums that I will be paying as much as 5 - 6% tax less a year p.a., and with all of the jollies that goes with it (apart from being my own boss - which IS important to me). If the remaining 99% pay at a similar rate of - let's say - 3% less tax a year, isn't that a lot of extra revenue lost for UK plc? This coupled with the 'no cost' of (1) above surely indicates that UK plc is going to LOSE tax revenue, not gain it.
In the mean time, the confusion and FUD is costing business small and large alike. Small, because we never know if a new contract etc. is worth the hassle, and large because they cannot get the people in to do the work at a reasonable price, or - at worst - have to pay the extortionate day rates of the graduate body shoppers!
So what is the cost of all that? Can it be quantified, I doubt it. Either way UK plc is the loser. Can they (all the Politicos from all parties) not see this.
Capping the return from divies is a good idea (I wouldn't like to guess at what rate though). I would think that most of the people on this site would also agree. But because large businesses would have a pink fit, NL would never entertain such a simple plan. Hey and guess what? I reckon your civil servants could handle that simple extra work, rather than the IR35 'guess the status' situation we now find ourselves in.