revenue squeeze on sole traders?

[darag]

i've recently heard that revenue have decided that they don't want contractors in certain professions (in my case, software engineering) declaring as sole traders any more and that after this tax year, they are going to clamp down on the practise. has anyone else heard that this is happening?

i've always scrupulously paid my self assessment taxes and don't see what benefit there is in forcing the likes of myself to set up one person companies in order to work on a contract/casual basis. in conversation with people in a similar work situation but who pay themselves through a one person company, the tax i pay is about the same (roughly equal to what a paye worker would pay on a salary equivalent to my gross). is there something revenue have spotted that i am not seeing?

the only issue i can think of is that revenue are losing out on employers prsi; however if i set up a company, i will be working as a director and will be exempt anyway so this doesn't seem like a plausible reason.

 

[Capall]

SOLETRADERS

If you were an employee than the revenue would be getting more PRSI.
In some cases people are forced to be contractors when they would prefer to be employees. It is not very advantageous to be a contractor if you are only earning the same as a permanent employee.

I don't know about your area but certainly in the area of computers where there is a lot of contracting most recruiting agencies won't deal with a contractor unless they have there own limited company or are working through an umbrella company. I think the push for this came from employers who want to protect themselves from any attempt by the revenue to claim that the contractors are employees.
There is alot more regulations involved when you set up a ltd company,example filing accounts with the CRO etc and no real advantages except better pension options

 

[WizardDr]

Re: SOLETRADERS

The Revenue are noted in their unfairness to sole traders.

1. We were paying prsi / health levies on investment and interest income when all in paye land were 'overlooked';
2. You cannot pay yourself 'civil service mileage rates' but are only able to claim a deduction for 'incurred';
3. The brilliant SDT relief suits companies paying into trusts for directors pensions, but Revenue think self employed ..are not deserving;
4. They dont force paye people to make a return.

The revenue probably feel that if you have a single contract; one client; same place; and merely swopped places with an employed person that you are 'de facto' employed. The fact that our empoyers prsi is off the wall, doesn't matter to these guys.