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What you say about IR35 is a bit misleading. The point of IR35 was to close a massive tax loophole where people who were in effect employees working for a single employee avoided national insurance payments by being working for their own company, and paying themselves most of their income via dividends, this avoiding NI.

This is no way affected only IT.

Some contracts ends up getting taxed higher if you run them via an intermediary company (because the company gets charged employers national insurance contributions), but this reflects the fact that the contracting company gets away without paying NI, and so a contractor can generally get away with demanding a higher hourly/daily fee even for long term contracts.

There may certainly be some people that get unfairly affected, but the situation prior to IR35 was also quite negative, in that some people could drastically cut their taxes just by spending a couple of hundred pounds setting up a company, and bill their employer and pay themselves dividends, instead of being a paid employee of the same company.



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