Purposefully within IR35

[desir]

I need to form a limited company to take on some contracting work as the agency/client will not accept me as self-employed or PAYE and I don't wish to use an outside Umbrella/PSC.

Would the following assumption be correct;

If HMRC receive enough revenue, at least as much as they would from me being PAYE, then even if I fall within IR35; there is not any issue of non-compliance as revenue is at least equal.

[LisaContractorUmbrella]

It doesn't really work like that; you are either inside IR35 or you're not and you should draw dividends/salary accordingly. Have a look at the guides on here and then get a decent accountant that understands the industry - if you set up your own Ltd you need to understand your responsibilities as a Director

[tractor]

.....

I need to form a limited company to take on some contracting work as the agency/client will not accept me as self-employed or PAYE and I don't wish to use an outside Umbrella/PSC.

Would the following assumption be correct;

If HMRC receive enough revenue, at least as much as they would from me being PAYE, then even if I fall within IR35; there is not any issue of non-compliance as revenue is at least equal.

Despite what anyone says, there is no such thing as a PSC.

There are limited companies, public limited companies, limited liability partnerships and schedule D/self employed. Community Interest Companies don't come into it because clearly, you are not one.

There is a whole landscape of things that you need to understand before making a decision. Look to the right and you will find links to all of the information that you need.

The first question that you need to ask is 'Why do you want to contract when you would have to pay the tax of a permanent employee with absolutely none of the benefits?'

[Maslins]

Is your question effectively "If I take a huge salary from my own Ltd Co and suffer the tax/NIC consequences, can HMRC still punish me for not operating IR35?"

To the strict letter of the law, I imagine the answer would be yes. Practicality would say that HMRC are only ever going to target the juicy opportunities...so someone paying out most of the company income as salary is highly unlikely to be targeted, as the potential gain for HMRC would be negligible.

Over the years we've had a handful of clients who started off with that kind of approach (well, not maximum salary...but certainly way above the typical NIC threshold)...though over the years their salary always drifted downwards when they started to see the tax savings. Not one of them has been caught over IR35 yet!

Why not enjoy the benefits of low salary high dividend and get a comprehensive IR35 insurance policy in place? Sure, it'll be a few hundred quid a year you'll likely never need to call on...but it should give you the peace of mind and be more than covered by tax savings.

[computerguru]

Why not enjoy the benefits of low salary high dividend and get a comprehensive IR35 insurance policy in place?

Any suggestions for "comprehensive" policy please?

[cojak]

IPSE+ membership

[TheFaQQer]

Any suggestions for "comprehensive" policy please?

Qdos TLC35

IPSE+ membership

It has many benefits, but it isn't comprehensive, since it won't pay out any losses if they fight and lose. Or don't fight at all and tell you to pay up.

[Maslins]

Qdos TLC35

This was the one I had in mind, as it not only covers legal costs of fighting your corner, but also any additional taxes suffered if you were to lose.

[cojak]

Qdos TLC35



It has many benefits, but it isn't comprehensive, since it won't pay out any losses if they fight and lose. Or don't fight at all and tell you to pay up.

Interesting. Make me wonder what's the point of IPSE membership if that's the case.

[TheFaQQer]

Interesting. Make me wonder what's the point of IPSE membership if that's the case.

Business interruption insurance, agency / client default insurance, jury cover, sickness cover etc. For that insurance cover alone, it's worth the fee.

Plus their significant lobbying efforts to get what contractors want.