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Shout99.com - Freelancers Outside IR35

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Q6. MSC regulations
by Susie Hughes at 16:49 20/11/08 (Question Time)
John submitted this question for Mark:
I would like to know when they propose to look at the ridiculous legislation that is MSC (or managed service company legislation that was rushed through on the 6 April 07. I would hope that if they scrap IR35 they would also look to get rid of MSC, which I think was put forward as a method of tackling the so called problem of Ltd Company contractors, due to IR35 being a complete failure.

In addition, I have proven that for an IT contractor on 100K per annum, the total contribution in taxes if he worked PAYE would be approximately 40K.

If he used a Limited company, his contribution in Vat and Corporations tax year on year would be 35K (or 88%) and this is for someone who has no work benefits, pension etc and is taking more risk, so in my opinion the extra return is warranted.

My question is therefore, why does the government insist in chasing and hounding contractors who contribute overall almost as much in taxes (albeit not as PAYE/NI but in another form) as PAYE employees?

Why not focus on the offshore contractors who often pay no taxes at all?

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Susie Hughes Shout99 2008

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