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Comment by cjs_ac | Hacker News Reader

> The Upper Tribunal — having already determined potato granules to be part of the extended potato universe — didn’t like this line of argument, judging that the potato starch and granules must be combined to judge overall potatitude.

Okay, I'm sold. When I have the money, I'll get a subscription to the FT.

On a less jocular note, this article is a good reminder that, contrary to most discussion here on HN, laws aren't algorithms that the powers that be execute against the world, but are rather heuristics that courts have to interpret in the context of specific cases.

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FT occasionally publishes entertaining pieces, but make no mistake - their editorial line inherently favours the ultra wealthy and government perspectives. A classic example is their coverage of IR35, crafted to shield big consultancies from competition, not the taxpayer. They parrot government propaganda, as if their critical thinking faculties mysteriously switch off whenever they touch the topic. They favour policies and narratives that sustain the power of large players, often at the expense of small businesses, freelancers, or challengers. Don't feed the beast.

As much as I agree with many of the biases of the Grauniad, I feel increasingly irritated by the blatant pandering to my sensibilities. The 'what happened' part of the article is so short on details it's barely there and the 'analysis' part is almost always just telling me who are the goodies and who are the baddies. If they quote experts, it's always an explanation of the most basic shit, because that's all the journalist understood. All of the non-elite media is like this: the analytics seem to have told them that ragebait is the only thing that gets ad revenue.

I just want to know what's going on in the world, and interesting analysis. I don't want analysis that tells me that I'm a good person, I want analysis that tells me something interesting about the world, even if I don't agree with it. If I have to pay a Bond villain to get that, so be it.

I get it - FT feels like the antidote to shallow ragebait because it's polished, detailed, and authoritative. But in my opinion, papers like the FT, exist less to inform you fully and more to shape your perception - a polished form of narrative management for the benefit of the said elites, not you. The elites themselves, though, aren't relying on newspaper analysis. They have access to internal briefings, specialised research, paid private reports, strategic intelligence, and direct advisor networks - insights and data that never make it into public media channels.

So, so, true. Even more irksome when the country is faced with massive economic challenges and the politicians make choices that they seek to avoid justifying and do not appear to be in the national interest.

Do you have a recommendation of where one should read?

> IR35, crafted to shield big consultancies from competition, not the taxpayer

I think this is a crank belief, and my guess is that you are an aggrieved ex-contractor. But i would definitely be interested to hear more about this theory.

IR35 only applies if the worker owns the business delivering the work. Big consultancies are completely exempt — even when their staff do the same job, in the same client seat, for years. The legislation funnels work away from independents toward large firms - it’s a structural outcome of how the rules are written, all under the false banner of tax fairness. At its core, IR35 was about consolidating control over skilled labour, locking clients into corporate pipelines, and eliminating independent operators who could undercut on price and offer better quality.

I also hate IR35, mostly because it has always been so completely unclear on whether anyone is compliant with it. HMRCs own online assessment was shown to be utterly unreliable. My single biggest insurance expense was always for IR35. And you had the constant worry that one day you would be investigated, and have back taxes applied going back years, regardless of how compliant you thought you were. It's a huge horrible mess of a law.

Big consultancies are exempt because all their staff are paid at market rates and taxed as normal employees. Let's be honest - most contractors were paying a much lower rate of tax than anyone else holding a similar position. I believe this gap has now narrowed considerably though - been out of contracting for a few years now.

You're right that IR35 has always been a mess - but that last point seriously misses the mark.

Big consultancies aren't exempt because they "pay market rates" - they're exempt because the worker doesn't own the delivery company, so the client carries no IR35 risk. Meanwhile, the consultancy bills the client often 2-3x the day rate and books the margin as corporate profit - profit that’s often structured to minimise UK tax exposure (through internal charges, offshore entities, etc.).

It's tempting - and convenient - to reduce a small, one-person business to "just an employee in disguise," but that's classism in its purest form.

Contractors didn't have tax advantages over big consultancies or employees - in fact, they often paid much more. They had none of the multinational tax structuring, none of the offshore routing, none of the internal "cost shifting" that lets large firms declare minimal UK profit and no top accountants on tap.

Employees typically see a small fraction of what the consultancy actually bills for their work. So the idea that big consultancies "do it right" while small independents were somehow gaming the system is a myth - one that government and corporate lobbyists have carefully exploited to shut down independent economic actors and funnel the contracts back to large firms.

The goal of IR35 is to ensure that someone doing a job pays about the same tax as an employee in a similar position [1].

While you are strictly correct that the legislation doesn't apply unless you are the owner of the small business providing the services - I guarantee you that if the consultancies did not in fact pay their employees at market rates, and instead paid low and then distributed dividends (or some other tax avoiding scheme), then there would be similar legislation that applied to them.

The tax man just doesn't like large numbers of workers paying less tax than they think they should.

[1] https://www.gov.uk/guidance/understanding-off-payroll-workin...

Big consultancy employees doing the same work are paid far less than independent contractors once were, meaning they pay less tax individually, while the consultancy charges the client 2-10x more and funnels the profit through corporate structures to minimise tax further.

You say, "if big firms did X, they'd face similar rules" - but they already do worse, on a much larger scale, and they're rewarded with government contracts, tax privileges, and regulatory cover.

IR35 wasn't about fairness. It was about shutting down small, skilled independents so big firms could lock in the profit stream.

> The tax man just doesn't like large numbers of workers paying less tax than they think they should.

This is pure classism - the assumption that a working-class person cannot possibly run a legitimate business competing with a big consultancy on price and quality. No: they're just a tax-dodging worker who must be stopped.

I never said IR35 was about fairness.

It was because they really didn't like contractors using tax avoidance schemes to pay a much lower rate of tax than other people in the same position. Pay low, pay no income tax, national insurance or employers national insurance, and take the rest in dividends.

The fact that large multi-nationals do a lot worse tax wise in other areas of business is irrelevant to IR35. They are much harder to get under control than individuals. Although I still maintain that if they paid their workers the same way most contractors did, HMRC would clamp down on that very quickly. Because they can easily go after people's personal tax affairs; big corporations with expensive lawyers not so much.

It's really not classism either. It has nothing to do with being working class.

You're making two contradictory claims.

First, you say big consultancies would face similar crackdowns if they paid their workers like contractors. But that ignores the fact that big consultancies already do far worse - they pay those workers far less, charge the client multiple times more, and funnel profits through complex corporate tax minimisation schemes. And somehow, that's fine?

> Pay low, pay no income tax, national insurance or employers national insurance, and take the rest in dividends.

That's a misleading argument. Taxes aren't hypothecated - it doesn't matter if it's labelled income tax, NICs, or dividends. What matters is overall tax contribution relative to the full value of the work delivered.

A contractor's small business typically generated more total taxable value - as both personal and business tax - compared to the portion of client fees that actually passed through to consultancy employees and stayed in UK tax channels, once the consultancy layered on profit extraction, internal costs, and offshore routing.

Secondly, this "tax avoidance" narrative was easy to sell because most people don't understand how the tax system works - and because the independent contractor is visible, familiar, and easy to resent. They look just like the person judging them - maybe even sit at the next desk - but they're earning more and keeping the rewards of their own work.

It's far easier to stir anger at that visible success than to explain how large firms quietly charge clients £1,000 a day for the same job, pay the employee £45k, and funnel the surplus offshore. The real extraction happens invisibly - while the system trains people to aim their anger sideways, not upwards.

> Large companies are just harder to control.

That's no excuse. They could have been included under IR35 - they weren't, because the system is designed to shield institutional profit chains, not treat all labour pipelines equally.

And no, it's absolutely about class - because IR35 rests on the assumption that a skilled, independent worker cannot possibly run a legitimate business, only a disguised employee gaming the system. That's structural classism - whether you acknowledge it or not.

I think we will have to agree to disagree!

I fundamentally don't think IR35 is a class-based attack on the working class. It was introduced by a Labour government.

The consultancies don't pay their workers far less than they could get in a similar position as an employee of the client - or they would leave! They do charge the client a lot more of course - that's their profit, deserved or not.

While I totally acknowledge that large multinationals play fast and loose with tax, it's a totally different problem than going after small fry. I would welcome efforts to crack down on that, it's just very, very hard to pull off.

So my view is simply that IR35 was the taxman trying to bring in more revenue by targeting a common tax avoidance scheme used by people they thought would be easy to target. And then executed it incredibly poorly.

The class dynamic isn't negated just because a Labour government introduced IR35 - Labour has historically protected institutional labour structures, not independent working people. The origin doesn't matter, the outcome does: IR35 crushed the ability of skilled individuals to operate as businesses, while shielding corporate profit flows.

> The consultancies don't pay their workers far less than they could get as employees of the client — or they would leave! They do charge more, of course — that's their profit.

Yes - and when those workers realised they were undervalued, they left to set up their own businesses. That was precisely one of the points IR35 was lobbied for: to stop that exodus and lock talent back into captive corporate pipelines. This was never about tax - it was about control over the market.

> I would welcome efforts to crack down on that, it's just very, very hard to pull off.

No - they could have simply included large corporates under IR35. That was a deliberate exclusion, not a technical challenge.

> My view is IR35 was the taxman trying to bring in more revenue by targeting a common tax avoidance scheme used by people they thought were easy to target.

Running a legitimate business isn't a "tax avoidance scheme." Contractors paid personal and corporate taxes - and proportionally, they paid far more onshore than the consultancies replacing them.

IR35 is a market capture - one of the most efficient, targeted consolidations of skilled labour the UK has seen. And it works.

Huh, in my workplace we use a lot of contractors and also use consultancies. They serve different purposes, for us at least.

The contractor market is hardly dead as a result of IR35 - even though it is a huge pain in the ass for everyone.

I never said that running a legitimate business is a tax avoidance scheme. But I can count on the fingers of one hand the number of contractors I know whose legitimate businesses pay employers national insurance (if outside IR35). From HMRC's perspective, that is a gap they would like to close.

Anyway, good to hear different perspectives - we aren't going to agree, but I enjoyed discussing it with you.

"The contractor market is hardly dead" - no, it's captive. People still need income, but now they're herded into umbrella schemes or inside-IR35 roles that offer none of the rights of employment and none of the autonomy of business ownership. Independence wasn't taxed - it was dismantled.

Contractors and consultancies are the same thing, just at different scales. Both supply labour-for-hire. The only distinction is scale and ownership. IR35 only applies if the worker owns the business. That's protectionism.

The employer NIC line is a classic diversion. Taxes aren't moral based on the label. What matters is total contribution - and many contractors paid more in combined personal and business tax than consultancy employees and their firms ever did.

"From HMRC’s perspective…"

That perspective is the problem. It's not built to protect the taxpayer and foster fair economy - it's built to shield corporate structures, outsource enforcement risk, and target the smallest players who can't fight back

>IR35 wasn't about fairness. It was about shutting down small, skilled independents so big firms could lock in the profit stream

That is way too sophisticated. The simpler explanation, governments look for ways to squeeze more tax out of people. IR35 was an easy win for them, since it typically impacted only people who were effectively already employees by using tax loop holes to pay less. I know, I was one of them.

That's not a simpler explanation - that's just swallowing the official propaganda.

IR35 was never about raising tax. If it were, big consultancies would have been a primary hit, as this is where actual tax avoidance is.

You may have accepted the "I was one of them, using loopholes" framing, but running a small business isn't a loophole - and repeating that myth only props up the system that shut you out.

> but running a small business isn't a loophole

If you run a genuine small business, then you're not in IR35 because you'll be doing jobs for multiple clients.

Come on, let's not pretend here.

IR35 only applies if the worker owns the business and it's irrelevant how many clients they have. A big consultancy can have just one client for years and IR35 won't apply.

I think it is entirely possible to run a genuine small business and only work for a single client at a time - given that what is being sold is the time and skills of the owner.

Certainly true that working for multiple clients simultaneously pretty much insulates you from being inside IR35 though.

I'd venture that 99% of tech contractors in the UK were doing the same jobs as permanent employees, at the trade off of more pay, lower tax, and supposed lower job security.

That is what I was, and every single other contractor I knew.

They cater to their readers

https://commercial.ft.com/audience/

This is frankly not true. They have news but also opinion pieces and it is important to separate the two. It is also important to look at the specific journalist/guest who wrote it which they make sure to feature prominently at the top along with any disclosures of shares/positions.

They for example often publish articles encouraging lower taxes, but also those advocating for wealth taxes, land value taxes, estate taxes, non-dom/exit fees which are often the ones which specifically target the ultra rich.

The important thing to note is that on any financial trade, a party is on each side, and both will be reading the FT so they have a vested interest in trying to present both sides to capture this audience.

There are heavy-weight bond investors for example, who believe government debt is too high, and we need to tax the ultra-wealthy in order to reduce deficits.

The FT is well worth reading (regardless of anyone’s personal beliefs, it’s useful to get a sense of how the wealthy and powerful think by reading their papers) but note that the FT Alphaville blog, which published this piece, is free to read if you create an account (you don’t need to pay).

This is not necessarily a paper read by the rich and powerful, but just by those in the finance industry/politics/academia/c-suites/board-members. It combines two key markets, objective no-nonense news pieces heavy with data and a light analysis (it's very good at separating the data from analysis/opinion) and also opinion pieces from high-influence people such as the top members of various governments, central banks and think tanks. You can read an opinion pieces from the heritage foundation, next to one written by the founders of just stop oil or other.

> This is not necessarily a paper read by the rich and powerful, but just by those in the finance industry/politics/academia/c-suites/board-members.

I’m not sure who you think wealthy and powerful people are, if not those

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