Puzzled as usual
So the contractor is treated as employed and put on payroll.
This means that tax and NI are deducted at source including employers NI.
[I am assuming the following, but this is the puzzle.]
Contractor also gets holiday and sick pay and other benefits such as pension contributions.
In this case what is the benefit in using a company to handle the income?
Surely the sane option is to mothball the company and become an employee.
Thus moving from a charge on the current accouting year to a long term liability for all the overheads required to feed and water employees. Presumably this does not look good in the long term accounts.
In for 2 years and you are more difficult to sack, as well.
Head count goes up, long term liabilities go up, flexibility in staffing goes down.
Trying to push patients into the private sector where these constraints don't apply?
Biting the hand that feeds IT
