Freelance work on the side
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  1. #11

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    Quote Originally Posted by MattZani View Post

    A friend of mine is a permie for company A but is about to leave (notice handed in) to join company B for another permie role. Company A and B are not competitors and do not even operate in the same industry.

    Company A outsources work to an agency. Is it possible/legal for my friend to engage with the agency and do work for company A on a freelance basis? Nothing is mentioned in the employment contract.
    If you're friend is a perm at company B, and company A are willing to write cheques directly to your friend (not via agency or to a LTD company), then the chances of getting caught for tax evasion are really slim. Company A or your friend would have to be investigated and the larger Company A is the harder it would be find anything. Most companies don't get investigated to that level of detail unless they go bust

    I've seen plenty do it and never seen one caught. This is not advice just spelling out the risk. It is illegal but unless it's hundreds of thousands nobody will go to prison for it.

    As for IR35... forget it..... Just declare as extra income self-assessment.

  2. #12

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    Quote Originally Posted by SueEllen View Post
    Not quite.

    There is a grey area if the client employes permies who are also skilled professionals who do the same role as you as they will also do the work the way they want as frequently managers wouldn't have the knowledge to do D&C in the work they do.

    Therefore to distinguish you from them, you need a schedule of work.
    IR35 is a bit academic. OP's friend will be perm at company B, paying PAYE and full NICs (most likely).
    Running a LTD will save the tax on the 5k dividend allowance only. Is that really worth the cost of a LTD and accountancy fees? I suggest not, or it's very borderline.

  3. #13

    Should post faster


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    Thanks for the replies

    Might be worth saying that when I said agency I didn't mean "recruitment agency"...I meant the other type of agencies (creative/marketing/digital agencies).

    Situation for my friend would be:

    - He leaves permie job at company A
    - He joins company B as a permie 9-5
    - Does bits and bobs (work for company A) for the agency at night/weekends
    - Company A wouldn't even know that my friend is the one who does the work
    Last edited by MattZani; 12th September 2017 at 09:32.

  4. #14

    More time posting than coding

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    Quote Originally Posted by Lance View Post
    Is that really worth the cost of a LTD and accountancy fees? I suggest not, or it's very borderline.
    There is always an alternative
    Just watching what I say

    We now offer Ltd too, so if you need a company that you can switch between Ltd & Umbrella, just shout!

    Connect with me on LinkedIn

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    Should post faster


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    Quote Originally Posted by mudskipper View Post
    Which one? Your friend will need to check the new contract.
    either one

  6. #16

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    Quote Originally Posted by lucycontractorumbrella View Post
    There is always an alternative
    and why would a brolly be cheaper than simply putting it into the correct line on the SA form?

    no offence intended but I cannot see a few bits and pieces of freelance work need a full umbrella, or a LTD when there is a full-time permie job consuming all (most) of the available tax allowances.

  7. #17

    More time posting than coding

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    Quote Originally Posted by Lance View Post
    and why would a brolly be cheaper than simply putting it into the correct line on the SA form?
    Just an alternative if the end client won't operate with a sole trader for any reason.
    Just watching what I say

    We now offer Ltd too, so if you need a company that you can switch between Ltd & Umbrella, just shout!

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  8. #18

    Old Greg is my bitch's bitch

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    Quote Originally Posted by Lance View Post
    If you're friend is a perm at company B, and company A are willing to write cheques directly to your friend (not via agency or to a LTD company), then the chances of getting caught for tax evasion are really slim. Company A or your friend would have to be investigated and the larger Company A is the harder it would be find anything. Most companies don't get investigated to that level of detail unless they go bust

    I've seen plenty do it and never seen one caught. This is not advice just spelling out the risk. It is illegal but unless it's hundreds of thousands nobody will go to prison for it.

    As for IR35... forget it..... Just declare as extra income self-assessment.
    Why is it illegal if declared?
    Where there's muck there's brass.

  9. #19

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    Quote Originally Posted by northernladyuk View Post
    Why is it illegal if declared?
    The suggestion I was alluding to was not declaring it. Which is illegal but very low risk in the circumstances. Perhaps I wasn't clear. But that was not my advice (which was stick it on SA).

  10. #20

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    Quote Originally Posted by radish2008 View Post
    It struck me yesterday that D&C can easily be circumvented by a simple agreement of the form:

    1. I give you the work.
    2. You decide how you're going to do it.

    And voila ! Outside IR35.
    In theory, it should be this simple, but the more boxes you tick in terms of being outside IR35, the easier it is for your legal representatives (IPSE/QDOS/Whoever) to tell HMRC to take a running jump if they ever open an enquiry.

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