Re: Anonymous Contractor
Most contractors (I know) do this.
However, they do this within their company, so that their company can provide them with holiday and sick pay. Inside IR35 this is, effectively, impossible.
Let's take an example of a person who works for one whole year then is sick the entirety of the next.
An employee (with a reasonable employer) gets, say, £50k both years, and pays relevant taxes on this.
A contractor outside IR35 earns £100k profit and draws £50k in the first year, paying relevant taxes. He then has enough to draw £50k in the next year, again paying relevant taxes.
A contractor inside IR35 has to draw the whole £100k in the first year, being clobbered by the extra tax on that. The second year, he has to pay for his own sickness out of the over taxed amount, and cannot offset the fact that he was unable to earn anything that year against other tax years.
Biting the hand that feeds IT
