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IR35 contractor tax reforms crawl closer to UK private sector with second consultation

Doctor Syntax Silver badge

Here's an alternative model.

Income tax is paid on what the engager pays.

Permanence of job and all benefits such as entitlement to holiday pay, sick pay etc. are treated as benefits in kind and subject to additional taxation.

The tax take of the benefits in kind allows the percentages of the various income tax bands to be substantially lowered.

The net outcome could be the same as now for freelancers and permies but the permie tax inspectors can then understand that they and the freelancer are paying the same tax on money received and the extra tax they, the tax inspectors pay is due to the things they get and the freelancer doesn't.

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