Moving from inside to outside IR35

[chris424uk]

Yeah I checked out the Sticky on accountant recommendations and chose Gorilla Accounting. Going to ask them to deal with company formation and the fundamental stuff. I'm in the process of reading up on IR35 and how to stay outside, which so far seems fairly logical; pay your taxes and SATR on time and keep accurate records, etc.

[northernladuk]

Yeah I checked out the Sticky on accountant recommendations and chose Gorilla Accounting. Going to ask them to deal with company formation and the fundamental stuff. I'm in the process of reading up on IR35 and how to stay outside, which so far seems fairly logical; pay your taxes and SATR on time and keep accurate records, etc.

Erm, what? Absolutely not. What has SATR and paying taxes got to do with anything. Where did you get that one from. Start from the beginning again. I don't think you could have got it any more wrong than that.

There is a section on the guides on the right for IR35. It's woefully out of date but should tell you what it is, what it's for and what the pillars are.

[Maslins]

IR35 isn't related to paying your taxes on time! It is a bit woolly, but basically is trying to distinguish between someone running a business and a disguised employee. These days the onus on that decision generally rests with the end client, so if they're happy it's outside IR35, you should be fine.

Creating a Ltd Co is a bit like getting a puppy, it's not just for Christmas. You say your contract is for 6 months which is a good start, but if after that you want to return to employment or inside IR35 contracting and want the company closed, be warned you'll likely end up paying as a minimum a years worth of accountancy fees for it all to be dealt with.

Your accountant should be able to hold your hand with most of the things you'll need to get up and running, and advise which things it's critical to get set up ASAP and which are less urgent. Good luck with it

[chris424uk]

Thanks all - as I've said, still very early days in getting up-to-speed on all things IR35. I've set-up a Ltd Co with a contractor accountancy and everything should be on track for the start date. Now just need to do further reading on IR35, expenses, admin, etc. All the fun stuff The contract is a minimum of 6 months with a high likelihood of extension and plan on contracting outside for the next 1-3 years minimum.

[northernladuk]

Thanks all - as I've said, still very early days in getting up-to-speed on all things IR35. I've set-up a Ltd Co with a contractor accountancy and everything should be on track for the start date. Now just need to do further reading on IR35, expenses, admin, etc. All the fun stuff The contract is a minimum of 6 months with a high likelihood of extension and plan on contracting outside for the next 1-3 years minimum.

Couple of newbie issues here. The contract is as long as the notice period and not even that. You will see a term in there saying you get paid for a signed timesheet. If they don't offer you work and don't sign the timesheet you can get walked on the day. We've had one poster get canned in reception on the first day of their contract. Many more even before they got to start. The contract will continue but you won't be paid a penny for the rest of the contract so effectively immediate termination. DO NOT get sucked in to thinking your six month contract will be a six month contract. Many have done that, leaving the last few months to pay the taxes off whilst spunking their money in the months leading up to that. Result? Grown men crying when they get the letter (i kid you not!)

Forget any likelihood of an extension. Assume the worst all the time.

You might plan on doing that but with the IR35 changes in April outside gigs are very thin on the ground. You will undoubtedly have bench time and an inside gig or two in that time period.

IMO you should actually be poorer in your first 6 months of contracting that you have ever been. You need to spend the absolute minium and build up a warchest of money in the company for when you are out of work. You need about 6 months of money to keep you going minimum. Then you can blow the rest on hookers on coke. No warchest and you are serious doo doo when you end up facing 3 months+ with zero income. It happens, a lot.

[ladymuck]

Getting the first gig is easy, getting the second isn't

[jamesbrown]

Creating a Ltd Co is a bit like getting a puppy

So an MVL is a bit like putting it down?

[Maslins]

So an MVL is a bit like putting it down?

Yeah, but with good motivations when it's at the end of its natural life

[chris424uk]

Couple of newbie issues here. The contract is as long as the notice period and not even that. You will see a term in there saying you get paid for a signed timesheet. If they don't offer you work and don't sign the timesheet you can get walked on the day. We've had one poster get canned in reception on the first day of their contract. Many more even before they got to start. The contract will continue but you won't be paid a penny for the rest of the contract so effectively immediate termination. DO NOT get sucked in to thinking your six month contract will be a six month contract. Many have done that, leaving the last few months to pay the taxes off whilst spunking their money in the months leading up to that. Result? Grown men crying when they get the letter (i kid you not!)

Forget any likelihood of an extension. Assume the worst all the time.

You might plan on doing that but with the IR35 changes in April outside gigs are very thin on the ground. You will undoubtedly have bench time and an inside gig or two in that time period.

IMO you should actually be poorer in your first 6 months of contracting that you have ever been. You need to spend the absolute minium and build up a warchest of money in the company for when you are out of work. You need about 6 months of money to keep you going minimum. Then you can blow the rest on hookers on coke. No warchest and you are serious doo doo when you end up facing 3 months+ with zero income. It happens, a lot.

Appreciate the wise words - I've been contracting for a couple of years already, so not brand new to contracting itself. I already have an emergency fund of 6+ months, along with various savings and investments that could be liquidated if need be. I live fairly frugal and have a small mortgage, no kids, no car, no debts, wife in a stable permanent role, etc. I've also been known to do the occasional side hustle when need be (working in bars, etc.) Does this mean I can skip to the hookers and coke stage??

In the current market, I'd say probably 70% of contracts are inside and 30% are outside in my line of work. Especially now there's fewer restrictions in location and remote/hybrid working this opens up the whole country. My approach thus far has always been to build my network of recruiters/agencies, scan the market for roles months before the end of the contract - added leverage to ask for a higher day rate and a plan B if extension does not materialise. Anyway, nothing is without risk so fingers crossed.

[chris424uk]

One thing I did want to ask was, the agency/recruiter asked me to complete a questionnaire from Kingsbridge (an IR35 assessment) - a lot of the questions looking to establish how much of an 'employee' I will be within the role (i.e. will I attend team meetings, use their work laptops, be based in their main building, etc.) I answered this as truthfully as I could, with limited detail on exactly how the role will play out as we've yet to get into a lot of the contractual details. Just wondering if anyone is familiar with this questionnaire and what its purpose is? Is it to cover the recruiters ass to say they've 'done their bit' or is this going to determine my status for me?