Categorized | news

Contractors have “Unfair Tax Advantage” says Report

In a report that is sure to make contractors laugh, the IFS, Institute for Fiscal Studies, have said that self employed people have an unfair tax advantage.

Do we really need another silly report where someone who doesn’t know what they are talking about, are paid to sit around and write about what they know nothing about? I’ve seen some pretty ridiculous reports and studies about contractors and the self employed, but this one really does take the prize for being one that went right into my bin.

To summarise the report in one sentence (you don’t want to read it, trust me), what they are saying is that the tax system treats self employed people differently to those who are employed, which ultimately means they end up paying less tax, even though employees are 85% of the workforce compared to 15% self employed.

Sounds to me like someone just doesn’t know what they are talking about, and are now looking for any excuse to take a shot at self employed people, contractors, freelancers, gig workers…you name it, apparently we all have some unfair advantage.

Do you know what? I am not even going to get into the numerous reasons why this report is wrong on so many levels, but what I will say is this…the UK needs self employed people now more than ever before mainly because the labour market is changing and we have a potentially tough time ahead with Brexit on the horizon.

If you get a few small benefits from being a contractor then it should be applauded, not criticized, although if you ask me there are very few of the self employed who pay less tax than their employed counterparts, and if they do it’s because they get themselves a good contractor accountant who can save them a few quid.

Not only that, but when you are self employed then you are in a completely different situation than employed people. No holiday pay for one. Do I need to go on? If anything, I think that contractors should be paying a lot less tax than employees, but we won’t be seeing that anytime soon.

One interesting piece of information is that the self employed are going to have to pay about £285 out of their own pockets when the government bring in the new digital tax system which will have to be done 4 times a year, not to mention the extra cost of hiring accountants and time away from their business.

Employed people won’t have to do that. Didn’t think of that did you IFS? There was a lot of things that didn’t occur to you it seems.

So you can ignore this new report from IFS, and just get on with being self employed. Even if you do pay a bit less tax, it isn’t unfair and you don’t have any advantage.

Be Sociable, Share!

Leave a Reply

You must be logged in to post a comment.

  • Switch Accountants for FREE

    Switch Accountants for FREEAt K&B Accountancy Group we have introduced a simple and straightforward approach to changing accountants. We’re offering contractors, consultants and freelancers the opportunity to switch to K&B Accountancy Group for FREE without the need to pay for any ‘catch up’ or retrospective accountancy fees for the previous year’s accounts and corporation tax return* *T&Cs apply

our top 5 twitter posts


contractor accountants


twitter Join the conversation
Free Telephone Advice