to be LTD and risk IR35?

**pr1** · 11 April 2016, 14:56

I'll leave my opinion out of it but:

Chance of investigation is approximately 1 in 1000

That said, to swap from an umbrella to a LtdCo whilst at the same client is generally said to raise a flag (as far as I know there is no evidence of this, but you wouldn't know)

No one with QDOS TLC insurance has ever lost an IR35 case

**northernladuk** · 11 April 2016, 15:04

Great advice that is.. Ignore it cause you won't get caught? Ok for them to say, they don't care what happens to you. I'll bet most of them haven't a clue how IR35 works. It's staggering how many don't.

Apparently most LTD contractors out there are chancing it risking the fact that they might fall within IR35.

Complete guess work.

IMO if you are inside then account for inside, if you are clearly and demonstrably outside then account outside. Do it properly or don't do it at all. Things are changing WRT to IR35 in Apr 17 and we don't know how it's going to go yet. If you were in a role that had a questionable contract or something maybe but desktop support is an enduring role so will be very difficult to prove it's outside IMO. I believe this type of role, 1st and 2nd line etc shouldn't be handled by contracting methods as they are inside IR35 and temping type positions but that's my opinion.

Knowing you are inside but accounting for out is what? Fraud? Tax evasion?

**northernladuk** · 11 April 2016, 15:05

Originally posted by pr1 View Post

I'll leave my opinion out of it but:

Chance of investigation is approximately 1 in 1000

That said, to swap from an umbrella to a LtdCo whilst at the same client is generally said to raise a flag (as far as I know there is no evidence of this, but you wouldn't know)

No one with QDOS TLC insurance has ever lost an IR35 case

A whole raft of information and arguments missing out of that to make it any use.

Also it would be good to consider what's coming in less than a year as well...

**RTFM** · 11 April 2016, 15:16

Originally posted by northernladuk View Post

IMO if you are inside then account for inside, if you are clearly and demonstrably outside then account outside. Do it properly or don't do it at all.

Things are changing WRT to IR35 in Apr 17 and we don't know how it's going to go yet.

Is there any point, I mean advantage, to go for LTD and account for it as inside IR35? Might I as well stay Umbrella?

Changes for the better or worse on 17 April? We'll see.

A lot of LTD contractors I meet are chancing it and yes they are mostly clueless but seem to get away with it.

**LondonManc** · 11 April 2016, 15:16

Originally posted by RTFM View Post

Hi All,

I'm a confused newbie.

I've been working as an Umbrella contractor providing desktop support at a customer site for some time.

I've got LTD contractor colleagues who laugh at me saying I'm stupid to pay all those taxes and I will miss out on expenses.

I never considered going LTD as my line of work, desktop support at a client site, would be considered to fall within IR35.

But other contractors keep whispering in my ear that I should ignore this as chances of me being investigated and caught are pretty small if I would go LTD as they will focus on the big fish.

Apparently most LTD contractors out there are chancing it risking the fact that they might fall within IR35.

My hourly rate is £20 p/h.

What are peoples views on this?

Cheers

You're inside. You're on £20/hour. It's not worth the costs of an account, business insurance, etc. on the rate that you're on to go limited.

Go back perm, get skilled up and climb the ladder to third line support where the money is. Then grass your mates up to Hector because they're giving contractors a bad name.

**BlasterBates** · 11 April 2016, 16:01

I agree with NLUK most contractors are caught by IR35. In the past they never had substitution clauses and now they all have them and lets be realistic, these clauses are window dressing.

However with an IR35 compliant contract and some insurance you'll probably get away with it.

So basically with IR35 you will always be risking it and the chances of being investigated are in any case small.

**Fred Bloggs** · 11 April 2016, 16:18

IR35 is not the threat it used to be simply because of the new dividend tax. Once that tax rate is lifted, as it surely will be, IR35 can be assigned to history. I'm certain George intends it to happen that way.

**LondonManc** · 11 April 2016, 17:12

Originally posted by Fred Bloggs View Post

IR35 is not the threat it used to be simply because of the new dividend tax. Once that tax rate is lifted, as it surely will be, IR35 can be assigned to history. I'm certain George intends it to happen that way.

Dividend tax wasn't brought in to clobber just us. Raising it will also affect a lot of Tory voters (wouldn't stop labour doing it though).

**Eirikur** · 12 April 2016, 09:14

At a £20 per hour rate it is hardly worth switching to Ltd if at all.

to be LTD and risk IR35?