Re: So...
In fact, as it is generally accepted that a contractor's rate is higher mainly to cover the uncertainy and the lack of employment rights, those things can be said to be valued at the difference between the rates of a contractor and a permie.
Let's say that a contractor charges twice the permie rate, and that for the permie we talk of earns £40k. This means the permie pays £5628 in income tax and £3789 in NI, for a total tax of £9417 or 23.5%.
The contractor earns £80k, and pays £16k in corporation tax and around £8k in dividend tax, for a total tax of around £24k or 30%.
If you were to take the difference as the benefit of stability and employment rights, this makes them worth £40k, and that puts the employee on a very attractive sub-12% tax rate.
It's not fair that such an amazing, valuable benefit is not taken into account when talking of tax. Employees get this benefit tax-free, whereas contractors must pay tax on giving it up. Looking at similar role/level of experience/ etc, the permie gets a much better deal in terms of tax.
Biting the hand that feeds IT
