[varispeed]

> Its more tax efficient to be paid via your own Ltd company instead of as a PAYE employee, especially when you get into the highest tax bracket, and so the government loses tax revenue.

That's not true. If you pay yourself from your company whether it is dividends or salary, you pay tax as everyone else. Sure if you decide to retain some money in your company, you only pay corporation tax, but as soon as you decide to pay the remainder yourself you will pay personal tax anyway. That's how any business works!

It's completely pointless to do anything about this. Big consulting corporations do exactly the same thing, but are not being hounded by HMR.

[Nextgrid]

> you pay tax as everyone else

> whether it is dividends or salary

Dividends won't incur NI thus significantly reducing the tax impact.

[youngtaff]

Dividends incur dividend tax which means between corporation tax, and income tax the contractor will pay roughly the same as someone on PAYE + NI

What dividends escape is Employers NI and that's where contractors make a gain

Coupled with the ability to have a spouse as a director or shareholder and so income split with them

[Lio]

That might be true but they still attract capital gains tax and corporation tax.

Then there's all the other expenses of running a business such as accountancy fees, public liability and on going indemnity insurance premiums and business banking fees that an employee won't have to pay on their salary.