Forum menu
Well today I'm taking a benefit of being self employed. I've finished a big chuck of work, it is sunny, relatively windless (12mph) and 13° so I'm on the bike for a bit before the predicted couple of days of rain arrive.
If they don't tax that I'm on to a winner. 😀
Which is galling when my final salary pension was changed to a DB ten years into a job that took 7 years to train for with no compensating increase in salary.
DB is final salary is it not? The benefit being defined by said salary as opposed to being defined by your contribution/average earnings. (I have an inkling we've been here before)
Final salary is one type of DB (defined benefit), main other type is career average but any pension scheme where you know what you're going to receive post retirement is a defined benefit.
DC (defined contribution) is where you know what's paid in (x% of salary) but have no idea until the day you retire what you will be receiving post retirement.
For many years I managed a team of people who were both PAYE and day rate contractors. I was always a bit jealous of the contractors due to the amount they could take home vs PAYE.
Day rate at that time was around £350. Let's say 220 days a year worked .. so £77k before costs and tax etc. Comparably PAYE were on £35-40k gross (incidentally it would these days be considered disguised employment).
Now time has moved on, loopholes have been closed, thresholds changes etc and the pandemic has hit, I certainly wouldn't want to be self employed these days and I do feel for a lot of people who have been negatively affected.
Self employed people are the risk takers in the economy. They provide jobs and growth, without them we wouldn't have an economy IMO.
I've never been self employed although there are some aspects that are appealing.
I reckon some of the pension tax relief will be up for the chop in the budget. The government must lose loads through that (for me personally it's a great way to avoid substantial amounts of tax)
Self employed people are the risk takers in the economy. They provide jobs and growth, without them we wouldn’t have an economy IMO.
Some of them are. Some of them are one man band contractors who are happy to tell you how their accountant has set them up to minimise the tax they pay into the system, and then complain that the system doesn't provide enough.
Somewhere there is a happy medium, and I guess that varies on how much income a small business can generate.
Some of them are. Some of them are one man band contractors who are happy to tell you how their accountant has set them up to minimise the tax they pay into the system, and then complain that the system doesn’t provide enough.
Somewhere there is a happy medium, and I guess that varies on how much income a small business can generate.
That is complete crap for most one man band contractors. They take risk as they are having to find new work regularly juggle multiple clients and take on risk if stuff goes wrong.
Most do not expect handouts from the government when times are bad and nor do they get any. What they do want is an even playing field to compete with bigger businesses and consultancies.
It makes me laugh, people working PAYE do they do it because they feel its their duty to work for someone else and pay the most tax the possibly can. No its because they are too scared or too unorganised to work for them self. They are not prepared to constantly market them self, risk not having any work or have to spend the time actually running their company doing their VAT returns. No what that do is moan "Its not fair" pathetic 🙂
people working PAYE do they do it because they feel its their duty to work for someone else and pay the most tax the possibly can. No its because they are too scared or too unorganised to work for them self. They are not prepared to constantly market them self, risk not having any work or have to spend the time actually running their company doing their VAT returns.
You really do come across very very poorly, is that your intention or are you just very stupid?
They take risk as they are having to find new work regularly juggle multiple clients and take on risk if stuff goes wrong.
Hmmm that's certainly not my experience in the industry in which I work.
No what that do is moan “Its not fair” pathetic 🙂
Again not my experience. In fact the claim of "it's not fair" is normally heard from Ltd Company staff in reference to a "lack of sick pay", "lack of Paid Holidays" etc. My response to such claims has over the years been along the lines of "you do it's built into your rate" or "you should speak to your employer about that..."
Most of the other stuff you've referred to again isn't my experience either. They don't "market themselves", they don't juggle "multiple client" indeed many of them have worked for the same client for years if not decades and quite a lot of them don't actually do a very good job either but that's not really relevant to employment status.
You really do come across very very poorly, is that your intention or are you just very stupid?
Stay classy!
Some of them are one man band contractors who are happy to tell you how their accountant has set them up to minimise the tax they pay into the system, and then complain that the system doesn’t provide enough.
Well, the system allows this. Most people, PAYE or otherwise, would do the same given the choice of "paying less tax" vs "paying more tax". So if this isn't right or is being ruthlessly exploited the system has to change.
I think when you drill into the details it's probably not as bad as you think, and these people are projecting having advantages that are minimal.
Stay classy!
When people write such utter garbage that is so dismissive and rude about so many I do not feel the need.
You really do come across very very poorly, is that your intention or are you just very stupid?
Haha no not at all, fed up with the politics of envy that's all and being attacked for choosing to run a legitimate business.
It was a little tongue in cheek hence following the internet convention of adding a smiley at the end.
@anagallis_arvensis you have been extremely vociferous in the past defending your chosen profession as a teacher, why do you think I am poorly or stupid doing the same for mine? I might be being however being a deliberately provocative to make a point however.
Its a fact that everyone thinks that the country should pay more tax, just that it should be someone else paying it and not them.
I would argue its stupid not seeing small business as important to the economy. The irony is the whole rhetoric of us being somehow tax dodgers comes from the government, that most of the people on this forum despise. Its a classic divide and conquer strategy. All the recent changes to taxation on small business make them less competitive against their larger counterparts. Something that the left are harping on about all the time is the power of big business. So change that and support small business.
I would have no problem with a flat tax rate, that does not care how you earn't it and if its deemed that small business can't claim for expenses incurred going about their business then neither should big business.
So @anagallis_arvensis the Adhom attack is very bad form and generally the last resort of someone who has no real argument or stupid 🙂
Again not my experience. In fact the claim of “it’s not fair” is normally heard from Ltd Company staff in reference to a “lack of sick pay”, “lack of Paid Holidays” etc. My response to such claims has over the years been along the lines of “you do it’s built into your rate” or “you should speak to your employer about that…”
My experience of this is that's only the response of people who either don't understand they are running a business and unfortunately some big companies have dragged people into self employment who don't really understand what they are doing or the consequences of it.
Or in response to being treated like PAYE employees when it comes to taxation but not when it comes to benefits.
I can only talk for my industry (engineering) and none of the people I know would claim this totally the opposite they want to be treated like legitimate businesses.
I think I mentioned earlier in the thread I have worked for myself for 25 years, in that time the tax burden on my company has increased massively. I am OK with that, but not with the constant needling that I am some how pulling a fast one, cheating or a tax dodger.
I have my ideas on which group of people are the biggest tax cheats in our country and its not companies providing professional services (I sound like a prostitute now 🙂 ) However I am not going to tar them all with the same brush.
It was a little tongue in cheek
Is that what's known as the Edinburgh defence?
you have been extremely vociferous in the past defending your chosen profession as a teacher, why do you think I am poorly or stupid doing the same for mine?
You weren't you were attacking others.
You really do come across very very poorly, is that your intention or are you just very stupid?
Thanks for your errr... contribution.
On the topic at hand, I'm PAYE and it's exactly for the reasons others say. I don't want the hassle & the uncertainty of being self employed and I like the pension sick pay and the holiday. It's certainly not out of a desire to pay more tax - if it was I could just be self employed and make a voluntary contribution to the treasury.
Is that what’s known as the Edinburgh defence?
I will concede that the original comment was a bit below the belt, it was rude and I apologise to @MoreCashThanDash but I stand by the principle of the argument.
I will concede that the original comment was a bit below the belt, it was rude and I apologise to
Fair play, I apologise too.
Most of the other stuff you’ve referred to again isn’t my experience either. They don’t “market themselves”, they don’t juggle “multiple client” indeed many of them have worked for the same client for years if not decades and quite a lot of them don’t actually do a very good job either but that’s not really relevant to employment status.
Actually interested in what you industry work in? Why does your business not get rid of them? That's mad, the whole point of engaging someone on a contract basis is that you can get rid of them if they don't meet the needs of the business or you no longer needs the skills they provide.
I am more worried about all the takeaways that over covid19 have suddenly become "Cash only" despite previously taking card.
am more worried about all the takeaways that over covid19 have suddenly become “Cash only” despite previously taking card.
I noticed that and thought that too, not just takeways either.
Cash business really are the ones that people should be worried about, business to business transactions are easily audited.
I am more worried about all the takeaways that over covid19 have suddenly become “Cash only” despite previously taking card.
Best get used to that.Any dreams of a cashless society will be going right out of the window. As furlough ends and the real recession hits, cash is about to be making a bigger comeback than vinyl.
With all the implications for tax take
I will concede that the original comment was a bit below the belt, it was rude and I apologise to @MoreCashThanDash but I stand by the principle of the argument.
I'll be honest, the standard of debate from all of us on here, myself included, is so tetchy and stressy at the moment that it didn't even register.
So much nuance gets lost when commenting on an internet discussion. Like the key use of the word "some", which is immediately turned into an attack on "all".
Well said everyone. Group hug, sanity reigns.
Like the key use of the word “some”, which is immediately turned into an attack on “all”.
I think part of the problem was then one poster, who didn't even understand his own tax, did make it about all self employed people then doubled down when challenged.
There are a lot of misconceptions flying around.
Trying to steer it back, what would we like to see?
I'd thought the closing of the disguised employee loophole had happened but if that is still going on then it needs clamping down. Employers are more to blame than employees here.
So much nuance gets lost when commenting on an internet discussion. Like the key use of the word “some”, which is immediately turned into an attack on “all”.
Exactly how my posts were taken
Well said everyone. Group hug, sanity reigns.
Trying to steer it back, what would we like to see?
Jeff Bezos and his ilk putting their hands in their pockets and paying what they're due?
I'll wager he's done very nicely out of this and if just Amazon paid all the tax they'd properly be due then that'd cover a big chunk of what the ordinary working joe contributes.
Never gonna happen though because late stage capitalism.
Best get used to that.Any dreams of a cashless society will be going right out of the window. As furlough ends and the real recession hits, cash is about to be making a bigger comeback than vinyl.
With all the implications for tax take
Exactly the loss of tax take at this level is massive.
Percys spot on the big businesses only pay a fraction percentage wise that an individual or an SME pays in tax. If these organisations (Boots INEOS are other examples) actually paid the going rate non of this would be an issue.
But on here we debate the moral position of an an SME Director paying a few percentage points less in tax than a Full PAYE employee from a business they have risked money, time and sometimes their home in.
I also don't begrudge @tjagain and the rest of the public sector their pensions either 🙂 We all make different choices, I made one choice and for the most part I am happy with it. The fact I can't buy one is just the luck of the draw, you win some you lose some. I have loved ones who are teachers/police etc and I do sympathise with the rules changing.
Id rather we all were allowed a decent retirement, rather than pulling people down to my level where I will be enjoying the stress free permie life in B&Q when I am no longer relevant in my industry, 70 and can't afford to stop work 🙂 Thats not a dig at B&Q by the way 🙂 Just that I actually know a bit about tools, so think they might employ me 🙂
Exactly the loss of tax take at this level is massive.
Is it really though?
I'm not convinced that cash will make a comeback, I suspect people will continue to enjoy the convenience of cashless transactions.
I would suspect that the cash only people are probably the lowest paid who pay very litte direct taxes anyway and would probably qualify for tax credits etc. Indirect taxes eg alcohol / fags will still be paid via shops.
PAYE / Income tax is mainly paid by the well off eg Top 1% of earners in UK account for more than a third of income tax.
Thats not a dig at B&Q by the way 🙂 Just that I actually know a bit about tools, so think they might employ me
I know quite a few people who are looking forward to a bit of retirement part time work at B&Q!
But on here we debate the moral position of an an SME Director paying a few percentage points less in tax than a Full PAYE employee from a business they have risked money, time and sometimes their home in.
Well as a director / share holder they probably earn more, so if they paid the same % they would still take home more. If we're talking moral positions surely we should pay as we can afford and recieve as we need.
Just to give another example of the reality of self-employment during the pandemic, I was talking to another PAYE freelance designer yesterday. Up until last March we worth both really busy. She hasn't had a single days work since the industry effectively shut down last March. She also hasn't had a single penny in government support, as like so many of us self-employed people we are excluded from all government schemes
We are Schrodinger's taxpayers. Neither employed nor self-employed according to Rishi, so we get nothing.
Can't be bothered to read 5 pages of crap on this subject. Being Self Employed is bloody hard work.
-You break your ankle - 8 weeks off work.
-Your kid needs to be cared for - you lose a day's pay
-No pension scheme.
-No employment rights. Your customers can just tell you to piss off from one day to the next.
-Endless cost of tools, vehicles, insurance, post-modern need for compliance, certificates, registration, certificates, red tape, companies house and accountant fees.
All the above comes at a huge huge cost. The reason lots of self employed people don't pay very much tax, is because they are kidding themselves about how much they actually earn.
They see reasonable amounts of money ebbing and flowing in their account and estimate they are earning far more than they are.
There will be the idiots on here who say "well, you have to price those things into your business then don't you?", but in reality the world doesn't really work like that.
Being self employed is a hugely risky business. There are limited tax benefits to be had at the moment, but they are extremely limited and you are constantly exposed to the risk of illness/injury and the whims of the market.
My self employed mantras are:
Turnover is vanity, profit is sanity
and
Work smarter, not harder.
Actually interested in what you industry work in?
I work in offshore oil and gas where to be totally honest setting up a Ltd company was seen by a lot of Engineering staff as a way to simply pay less tax (Well NI normally) but plenty of people also "paid" their spouse a wage despite them not actually doing a job for the company. It was also allowed because there were often times that there would be a significant shortage of engineering staff to complete the work which helped to drive the culture. There are other more Admin type staff for whom contract working was the only real option so it's not universal in the industry but is for the disciplines. It basically these sort of set ups that IR35 was designed for and to be brutally honest the sense of entitlement that some have is pretty appalling.
Its actually dawned on me recently that now I've got a part time job to replace the gigs that I've lost, I don't really have any 'work stress' in my life. I mean obviously there's the lack of motivation to go and do a mundane job 2 or 3 times per week, but I'm not constantly looking at the diary working how many gigs or month I've got booked in for the next 6 months etc.
Previously I'd definitely have been lying awake at night a couple of times per week worrying that my career was going downhill because I'd not got enough gigs in the diary etc.
Good mate of mine is a Sat diver and I thought there were particular tax laws to cover you guys? Sort of some weird in between PAYE and self employed ?
I am sure he gets taxed a source, but does not get paid when hes not working etc.
I work in electronics and firmware design and I have seen people let go after 2 days if they are no good or don't fit in. There are some longer engagements but you tend to have to be good. Its a weird scenario you are good and clients like you so they give you repeat work then people then say its disguised employment. If you are crap and are forced to never darken the same door twice its not 🙂
if just Amazon paid all the tax they’d properly be due
They do - they pay thier corporation tax in the correct place just as wine producers pay their corporation tax in the correct place which isn't were they sell their product.
Yes, we need to hammer online sellers to protect our bricks and mortar businesses but that needs to happen via a whopping sales tax - higher rate of VAT on online sales, there is no other way. (And people who claim other ways are just using different words that mean sales tax.)
Good mate of mine is a Sat diver and I thought there were particular tax laws to cover you guys
Divers might be under different rules, I'm not sure. I'm talking about onshore based staff where it is fairly obvious to any reasonable person that it is disguised employment. Sat at the same desk, doing the same sort of work for years on end, perhaps moving from project to project and to be honest there isn't really that much difference in terms of security. About three weeks to be honest.
They do – they pay thier corporation tax in the correct place just as wine producers pay their corporation tax in the correct place which isn’t were they sell their product.
Fairly dubious they were, is the 'correct' place for UK sales to be taxed really Dublin?
They were routing all their UK sales via Dublin as the tax rate was lower there.
Even worse, until recently US companies reporting sales in Ireland managed to avoid any tax, falling between two different systems.
100% legal but morally indefensible.
100% legal
Yup, and nobody can think of suitable laws to change it.
Which is where sales taxes come in. Impossible to avoid legally and specifically designed to gather revenue in the place the transactions are made.
There will be the idiots on here who say “well, you have to price those things into your business then don’t you?”, but in reality the world doesn’t really work like that.
It does for me, my industry works on the basis that freelancers are all on PAYE.
Pisses me off that it's meant that a portion of my friends are furlough on 80%. And others are pissing and moaning about being contractors and getting nothing (shouldn't have spent that NI saving on a nice car and bought a £650 Berlingo like me then).
You've not been "forgotten", you should have paid yourself in a less tax efficient manner that actually reflected your earnings if you wanted the benefits of things like furlough.
Those of us on PAYE "contracts" on the other hand have actually been shafted because we were never incentivised (or given the NI break) to budget for a year off work.
Yup, and nobody can think of suitable laws to change it.
simple to do so with the political will. Turnover taxes, outlaw exporting of profits usually disguised as franchise payments or similar
There is no political will in the UK to do so
Those of us on PAYE “contracts” on the other hand have actually been shafted because we were never incentivised (or given the NI break) to budget for a year off work.
Yip. We've got the worst of both worlds. We've been bent over and they've gone in dry. And absolutely nobody appears to give a flying ****.
When it first happened I thought that there had obviously been some kind of oversight and there would be some adjustment. 11 months later I'm amazed at how naive and hopelessly optimistic that was of me. Nobody cares. We're invisible.
There are entire industries where PAYE freelancing is the standard. Or there used to be. I doubt there will be much left now