Ltd or Brolly - which way to go?

[CaptainDanger]

I have been offered a role where the company is happy for me to work outside of IR35 as the contract will only last 6 months with no prospect of a renewal, however the company they are working with who I am completing the work for would want me to be onboarded as a supplier of theirs if I was using a Limited company. They are happy if I am using a brolly and am inside IR35. Any ideas how I could satisfy all concerned and stay outside of IR35 for the 6 months? Is it just easier to suck it up and use a brolly and contribute heavily into my pension to offset the extra NI and Apprentice Levy?

[northernladuk]

What are your longer term plans? Continue contracting or back to perm/inside. A LTD only becomes profitable over a brolly after a period of time. For a short term gig they'll work out about the same, if not better via brolly if you are happy to throw it all in a pension.

I'm a bit concerned about your explanation though. It's not about people being happy. There is a legal requirement for the fee payer to issue an SDS with an official determination so it's got to be done properly, not to please all parties. Also you mention one party is OK with it but the party you will work for may want something else. You really need to understand the relationship properly so you can understand who is the fee payer. Not sure why the end client wants to onboard you and your LTD as a supplier if you are contracted to do work for client A to do work for client B. You should be engaged with Client A as a member of Client B so not need to be on boarded as a separate entity. You either don't understand the situation properly which you really need to do or the two parties don't have a clue what their responsibilities are around IR35.
If it's a bit of both, which it looks like then going inside would be the safest route for you.

Do some more digging, understand the situation, ask both parties what they know about IR35 and who is issuing the SDS. Whoever that responsibility sits with should look at the role and work out if you'll be a disguised employee or delivering a service and issue an SDS according. If that result is inside then you've no option but umbrella. If it comes back outside then you have to think about your longer term plans and open a LTD if you might use it again after or go inside for an easy life.

[northernladuk]

Oh, and remember whatever the SDS decision is it can be reversed anytime up to the first invoice is paid so if they don't know what they are doing and issue an outside determination they can reverse that after you've started.

[northernladuk]

Looking at your posting history it strikes me a bit strange that you've been both outside and inside before so should be in a better place to answer your own question than most on here who only know outside tbh.

[CaptainDanger]

Looking at your posting history it strikes me a bit strange that you've been both outside and inside before so should be in a better place to answer your own question than most on here who only know outside tbh.

Thanks for your responses. I'm out of touch nowadays and it's a short contract of 6 months with no renewal, hence why I am finding it hard to work out the best thing to do. Maybe for this occasion I am tempted to just go with the brolly.

[hobnob]

I have been offered a role where the company is happy for me to work outside of IR35 as the contract will only last 6 months with no prospect of a renewal

Thinking about the "3 pillars" of IR35 (MoO, RoS, D&C), I don't think that "no prospect of renewal" is relevant to any of them. Are they basically saying "You won't be around for long, so we'll risk it?"

the company they are working with who I am completing the work for would want me to be onboarded as a supplier of theirs if I was using a Limited company.

As NLUK said, this seems weird. If you became a direct supplier for the end client, where would the middle man (offering you the role) fit in? However, is it a problem to get onboarded? E.g. are they asking you to jump through lots of hoops? Potentially it could be a good thing, if this gets your company onto their approved supplier list (thinking of future work).

Is it just easier to suck it up and use a brolly and contribute heavily into my pension to offset the extra NI and Apprentice Levy?

Employer's NI is a consideration, but the apprenticeship levy isn't going to be significant. It's 0.5% of your taxable pay; on an inside rate of £400/day, I've been paying £8.75/week for the levy. By contrast, I'm paying £25/week to the umbrella company for their fees.

[CaptainDanger]

I decided to just go inside IR35 and not try to get on the approved supplier list with the end client. As I would have to setup a new Limited Co. there will be no trading history which will probably be an issue for getting on the list. In the end for a short contract I decided it would just be easier to swallow the Employer NI and Apprenticeship levy which come to about £400 p/m. At least the brolly comes with all the insurances included too which is helpful.
Thanks for the answers :-)

[northernladuk]

I decided to just go inside IR35 and not try to get on the approved supplier list with the end client. As I would have to setup a new Limited Co. there will be no trading history which will probably be an issue for getting on the list. In the end for a short contract I decided it would just be easier to swallow the Employer NI and Apprenticeship levy which come to about £400 p/m. At least the brolly comes with all the insurances included too which is helpful.
Thanks for the answers :-)

Was getting on their PSL even an option? It's highly unlikely a client will onboard a one man contractor LTD. Much more likely to put you through an agent.