Ltd company for 3 months or Umbrella?

[vs009]

Hi, I'd grateful for you some advice.

Have been offered a contract role starting on Jan 4 2021.
The agency have told me the role is inside IR35 and the client is offering either a full contract (via umbrella) for 12 months or a shorter contract until the end of March where I use my Ltd company.

A little confused as to which option to choose.
I spoke with one accountant who said it wouldn't be worth going the Ltd company option just for 3 months.

[Lance]

Hi, I'd grateful for you some advice.

Have been offered a contract role starting on Jan 4 2021.
The agency have told me the role is inside IR35 and the client is offering either a full contract (via umbrella) for 12 months or a shorter contract until the end of March where I use my Ltd company.

A little confused as to which option to choose.
I spoke with one accountant who said it wouldn't be worth going the Ltd company option just for 3 months.

the accountant is probably right.
I say probably as you haven't shared the day rate, nor your PAYE earnings to date.
If it's £10k a day then LTD is definitely worth doing. If it's £200 a day then it's not.

[northernladuk]

You've got a backup plan in case this gig evaporates before the start date?

[eek]

the accountant is probably right.
I say probably as you haven't shared the day rate, nor your PAYE earnings to date.
If it's £10k a day then LTD is definitely worth doing. If it's £200 a day then it's not.

Unless it's £10k a day and you finish the contract on March 31st how does the OP justify claiming the contract is outside IR35 when on April 1st the end client says it's inside IR35.

Don't use a limited company just use an umbrella.

[jayn200]

Unless it's £10k a day and you finish the contract on March 31st how does the OP justify claiming the contract is outside IR35 when on April 1st the end client says it's inside IR35.

Don't use a limited company just use an umbrella.

You only have to justify it if HMRC come asking about it. We have no idea how likely that is to happen yet. There may or may not be any penalties when that happens and when considering time value of money (if your money is earning you more than hmrc interest rates) + risk of getting caught it would probably be worth it for a lot of people in a lot of cases. I doubt it would be the case here though with a normal day rate over 3 month period considering the costs of opening/running/closing ltd company over 3 month period.

[BR14]

Unless it's £10k a day and you finish the contract on March 31st how does the OP justify claiming the contract is outside IR35 when on April 1st the end client says it's inside IR35.

Don't use a limited company just use an umbrella.

the OP already said it's INSIDE, so no point for Ltd
can't you guys read?

[Lance]

Unless it's £10k a day and you finish the contract on March 31st how does the OP justify claiming the contract is outside IR35 when on April 1st the end client says it's inside IR35.

Don't use a limited company just use an umbrella.

Nah. Take the £10k a day and walk...

[jayn200]

the OP already said it's INSIDE, so no point for Ltd
can't you guys read?

No, he said the agency told him it's inside. Theyre not a legal authority, just a private company. They are giving OP the option of making his own determination until April.

That's all perfectly legal. You may not agree with their assessment, they are not a legal body.

[Lance]

Ltd company for 3 months or Umbrella?

No, he said the agency told him it's inside. Theyre not a legal authority, just a private company. They are giving OP the option of making his own determination until April.

That's all perfectly legal. You may not agree with their assessment, they are not a legal body.

Correct. It’s up to the OP to make the determination. In between trying to decide whether to trust the accountant or a bunch of randomers on the internet.
What could possibly go wrong?

[vs009]

Thank you all - its unfortunately nowhere near 10k a day - I wish!
I do already have a limited company setup from when I contracted last year.
However, I am thinking to go for the umbrella route to remain inside IR35 and also to avoid the hassle of doing it for just 3 months.