Andrea Allsopp – Written evidence (OPR0011)

 

Introduction

I have been a contractor since 2008 and prior to that between 1997-2004.

I think it important to understand why some contractors operate the way they do and why the new rules post such problems.

The committee should investigate loss of VAT revenue, since banks cannot discount their VAT paid to contractors from their VAT payment to the government, it provided a windfall for the banks at the government’s expense.

Why do I Contract?

What do I Offer as a Contractor as Opposed to a Full-time Employee?

How IR35 Effects Clients

Conclusion

The perceived income from taxing current pay was optimistic, it did not look at the unintended consequences of bringing in IR35, something contractors might have easily explained.

There is no sense in working a short-term contract for the lower rates resulting from the IR35 rules, when it makes better sense to take fulltime work.  A fulltime job which I could travel to daily from home, receive benefits, expenses for working in other offices and longer term security, would be a better option.

The idea that most Contractors were not paying sufficient tax was by and large unfounded. 

Paying tax in advance on what appears to be a substantial income for a few months is unfair, when that money often has to be spread out to cover the periods where there is no work.  I typically take my daily rate and multiply it over 40 weeks to get an idea of my annual income, not 52 weeks. 

If you want a workforce that will go anywhere as needed, you should allow for a payment model for them to be able to afford to do so, which happened to be in place before IR35.

11 November 2021