Umbrella to PSC : Current views?

[elsergiovolador]

IR35 has written on the tin, that it is supposed to prevent the situation when an employee of the company (but I understand in this case it was an umbrella) on Friday, becomes a contractor on Monday. From your first post you said that going PSC is a tax effective option, so that suggests the arrangement has nothing to do with working practices etc and you won't suddenly become a legitimate business that does this sort of projects.

[skeeter1122]

IR35 has written on the tin, that it is supposed to prevent the situation when an employee of the company (but I understand in this case it was an umbrella) on Friday, becomes a contractor on Monday. From your first post you said that going PSC is a tax effective option, so that suggests the arrangement has nothing to do with working practices etc and you won't suddenly become a legitimate business that does this sort of projects.

Thanks. I think this may be the crux of it. Ive seen other discussions along a similar track - contractors who have been classed blanket as inside IR35, now wanting to come back into PSC mode at the same client. I guess even with the CEST tool basis being unsupportable, it doesn't look that good a proposition if under a magnifying glass from the revenue. End of the day, its only a few grand.....

Thanks for all the comments!

[elsergiovolador]

Thanks. I think this may be the crux of it. Ive seen other discussions along a similar track - contractors who have been classed blanket as inside IR35, now wanting to come back into PSC mode at the same client. I guess even with the CEST tool basis being unsupportable, it doesn't look that good a proposition if under a magnifying glass from the revenue. End of the day, its only a few grand.....

Thanks for all the comments!

There are definitely genuine businesses caught by this, when risk averse clients decided that they rather prefer to put everyone inside rather than worry the tax man may not share their outside assessment.

[Lance]

Thanks. I think this may be the crux of it. Ive seen other discussions along a similar track - contractors who have been classed blanket as inside IR35, now wanting to come back into PSC mode at the same client. I guess even with the CEST tool basis being unsupportable, it doesn't look that good a proposition if under a magnifying glass from the revenue. End of the day, its only a few grand.....

Thanks for all the comments!

I was going to say that it's not worth spinning up a LTD for a few grand. But as you already have the LTD. I'd say go for it.
If it's only a few grand saving, it's not as if HMRC will bankrupt you if they come looking. All they'll say is, "give us that few grand", to which you shrug and say "OK".
The risk you have here is purely down to additional costs of a LTD running for longer. But I doubt that will be huge.

The ones who fear HMRC the most are the ones with many years under the same contract. Short term stuff I doubt that HMRC will bother with anything more than a cursory glance at the contract. And it's not like they'll look within the six months, it's going to be in 2/3 years time or later. So worry if you're still there.