Inside IR35 PS - limited or umbrella

[psychocandy]

Currently got limited and dont plan on getting rid any time soon. Got a possible gig thats going to be inside IR35.

Accountant tells me its still better to do limited. Agent (yeh probably lying) is telling me to go umbrella.

In reality, whats the best? Im guessing limited and agency just dont want to bother with the pay side of things (which is why they are pushing me towards people like paystream?)

[Matt FPSGroup]

Currently got limited and dont plan on getting rid any time soon. Got a possible gig thats going to be inside IR35.

Accountant tells me its still better to do limited. Agent (yeh probably lying) is telling me to go umbrella.

In reality, whats the best? Im guessing limited and agency just dont want to bother with the pay side of things (which is why they are pushing me towards people like paystream?)

A lot will depend on whether the assignment is within the public sector, how long the assignment is for and whether the majority of your other assignments are inside or outside IR35.

If it is a private sector and/or short term assignment that’s inside IR35 and you predominantly use your limited company for outside IR35 assignments, it is probably worthwhile getting it paid through your company.

If your assignment is in the public sector and inside IR35 however, your agency will probably pay a lower rate than through umbrella, as they will be responsible for employers NI and the apprenticeship levy. As you will only be a deemed employee of the agency, they won’t have a tax code for you and will therefore deduct 20% for income tax and the usual rate for employees NI as well, before paying your company. You won’t be able to claim any expenses or utilise the tax advantages of having a company, yet your accountant will probably still charge their normal fee. In most instances, the take home pay for an umbrella worker will be higher than through a limited company, if it is a public sector assignment that’s inside IR35.

[northernladuk]

Don't we have a FAQ about this?

[TheFaQQer]

Currently got limited and dont plan on getting rid any time soon. Got a possible gig thats going to be inside IR35.

Accountant tells me its still better to do limited. Agent (yeh probably lying) is telling me to go umbrella.

In reality, whats the best? Im guessing limited and agency just dont want to bother with the pay side of things (which is why they are pushing me towards people like paystream?)

Third time's a charm, eh?

Couple of questions:-

1. Any advantage at all with staying limited rather than umbrella if its PS inside IR35?

2. Assume its less hassle for agency if you go umbrella? (because otherwise they'd have to sort the tax rather than umbrella doing it?)

1) Have you read the FAQ?

2) Have you read the FAQ?

[lucyclarityumbrella]

Accountant tells me its still better to do limited. Agent (yeh probably lying) is telling me to go umbrella.

Agent probably doesn't have the ability to operate the payroll, hence is telling you to go umbrella. There are a fair number of recruiters who are not equipt to handle the deductions so will effectively have no choice but to push you in that direction.
In realistic terms, if you're inside IR35 your take home will be the same, Ltd or Brolly plus there are no expenses for either, so it will either be personal preference or agency choice.
HTH

[TheFaQQer]

Agent probably doesn't have the ability to operate the payroll, hence is telling you to go umbrella. There are a fair number of recruiters who are not equipt to handle the deductions so will effectively have no choice but to push you in that direction.

equipped

In realistic terms, if you're inside IR35 your take home will be the same, Ltd or Brolly plus there are no expenses for either, so it will either be personal preference or agency choice.

Unless you want to use salary sacrifice to pay into your pension plan - in which case there is only one real choice to make.

[lucyclarityumbrella]

equipped

[psychocandy]

A lot will depend on whether the assignment is within the public sector, how long the assignment is for and whether the majority of your other assignments are inside or outside IR35.

If it is a private sector and/or short term assignment that’s inside IR35 and you predominantly use your limited company for outside IR35 assignments, it is probably worthwhile getting it paid through your company.

If your assignment is in the public sector and inside IR35 however, your agency will probably pay a lower rate than through umbrella, as they will be responsible for employers NI and the apprenticeship levy. As you will only be a deemed employee of the agency, they won’t have a tax code for you and will therefore deduct 20% for income tax and the usual rate for employees NI as well, before paying your company. You won’t be able to claim any expenses or utilise the tax advantages of having a company, yet your accountant will probably still charge their normal fee. In most instances, the take home pay for an umbrella worker will be higher than through a limited company, if it is a public sector assignment that’s inside IR35.

Normally outside but hey its a brave new world now in the PS.

[psychocandy]

Agent probably doesn't have the ability to operate the payroll, hence is telling you to go umbrella. There are a fair number of recruiters who are not equipt to handle the deductions so will effectively have no choice but to push you in that direction.
In realistic terms, if you're inside IR35 your take home will be the same, Ltd or Brolly plus there are no expenses for either, so it will either be personal preference or agency choice.
HTH

Hmm. Good point.

[psychocandy]

Ah ha - options appear to be umbrella or use company called paystream to process payroll and still use ltd.

Anyone got any experience of paystream for this purpose?