If your contract is not IR35 caught then I agree completely. If it is IR35 caught then I don’t.

it just wasn’t being used correctly by you in the first place i.e. it was going into your pocket rather than paying tax, NI, holiday pay all of which had already been factored in to the “gross” fee.

That is my point precisely. Previously the extra cash flow would be set aside to cover periods where you were out of work, sickness, holiday and time between contracts.

With IR35 you have to cover that out of taxed income.

Also as I said on DK’s blog, you cannot simply put fees in your pocket and avoid paying tax.

1. They contract because the job is not long term enough to take on a full time member of staff

2. If they are acting in their own best interests (which the contractor is also trying to do by paying as little tax as possible)they should ensure the “cost” of paying the contractor for a year is no greater than one year’s costs for a full time employee.

In other words, your fee already includes all the cost of PAYE, NI, Holiday entitlement, Sick Pay etc etc and it’s up to you to set aside that part of your fee to cover those costs.

If you choose to dodge these costs via a loophole which is then closed, you cannot whine on about “losing” part of your pay – it just wasn’t being used correctly by you in the first place i.e. it was going into your pocket rather than paying tax, NI, holiday pay all of which had already been factored in to the “gross” fee.

Get over it or push your fee up and see if the market will still bear your costs….

I agree with everything else you say about the tragedy that is Nu Labour other than the comment that the only good thing was to make the BoE independent.

Yes, this would have been good if it really was independent but, it is not.

I can also fully understand his current lack of well designed policy. He is wise to keep his cards close to his chest until the next election looms, lest New Labour steal the bits they like the sound of.

Whilst New Labour struggle with the concept of Blogs and proper unsanitised feedback from the Internet, Cameron would do well to embrace it warts and all. There is a good strong right wing blogging community to be find (in my view stronger than the left). Getting them involved would engage the public in a way that has never been done before. I should be blogging this… Watch this space.

Sigh…..