Contractors Acting as Disguised Employees
We look here at disguised employees. In the late nineties lots of companies were laying off permanent employees and re-hiring them on the Monday as contractors doing the same job in the same place.
This was of tax benefit both to the company and the contractor or disguised employee as the Government referred to them.
As a result of this, the Government created the IR35 tax which would catch these contractors and make them pay their full tax.
Unfortunately, it also caught many career contractors, who had been contracting for years, in their nets.[caption id="attachment_825" align="alignnone" width="225"] Contractors as Disguised Employees[/caption]