PAYE or umbrella

[rchm]

Hi all

I'm not new to contracting, but I haven't been for the past 3-5 years and noticed rules have changed.

Can I have some advice as to whether I should stick with PAYE or go umbrella please.

This is what I know so far:

Rate is £200/day (recruitment agency PAYE) or £250/day (umbrella)
Inside IR35, I believe I'm under SDC, but some umbrella says I'm not (just to get me to join then probably change their mind maybe?)

PAYE seems safe and less hassle, I can accrue holiday pay to take at any point, seems to be around £80 (taxable) per week. something like 12% of gross pay. So each week I get around £685 net, with £80 in holiday pot.

Will I be better off going umbrella? Based on not claiming expenses. (just the odd mileages going from workplace to another workplace during working hours, which is claimable I believe)

Thanks in advance (it is so confusing)

[northernladuk]

Speak to Lucy and Contractor Umbrella. She will give you the numbers. CU might be the best bet as you can put as much as you want in to a pension so much more efficient than PAYE or one of the other brollies.

[rchm]

I've decided not to have any pension and opt out where I can, unless its very attractive. I must have pensions scattered around from various short term contracts over the past 10 years ish, untraceable, probably loss forever, so I rather not have pensions at the moment.
I rather save/invest in something else for retirement.
Am I out of my mind to think that?

But good to know CU gives the option.

[lucyclarityumbrella]

Rate is £200/day (recruitment agency PAYE) or £250/day (umbrella)
Inside IR35, I believe I'm under SDC, but some umbrella says I'm not (just to get me to join then probably change their mind maybe?)

First of all £200 per day PAYE (on a standard tax code) nets £729.62 per week.

Umbrella on £250 per day, you net £779.94 (again standard tax code) per week.

With regards to the SDC, the only people who can determine that is HMRC, all of these tests are subjective and if it ever went to court could be argued either way. HMRC do not provide a clear definition of SDC, so it is one man's word against another, plus inside IR35 is likely to indicate NO expenses and under SDC (highly unlikely HMRC would determine otherwise).

HTHs

[lucyclarityumbrella]

But good to know CU gives the option.

Our scheme has no exit fees, so if you could track one of the "old" pensions down you could always transfer it at the end of the assignment so you don't have the hassle of lots of pots