New contract,

[Bluebird]

She is thinking of an umbrella, since she is a 1st timer.

Should she give the contract to an accountant to check it for IR35? The agent does not think it will fall inside it.
How long does it usually take to be checked and what happens if it fails in it?

What happens with regards to travelling? Will the transporation, accomodation, food come out of ther pocket?

thank you

If she is going with umbrella, then IR35 doesn't come into it.

She pays full PAYE on whatever is left AFTER the fess and expenses are deducted.

She will probably pay for the transport to and from the gig herself as well as accomodation etc, however she will be able to claim these as expenses - that doesn't mean she doesn't pay for them - it just means they get paid BEFORE TAX as opposed to AFTER TAX - which can be worth a few quid.

Be very careful though what she claims - what the umbrella companies tell you that you can clim and what the tax man will allow are entirely differnt sometimes.

[kellycell]

Hmm ok I am a bit confused now... so if you are in an Umbrella company you are not inside IR35? Then shouldn't everyone be in an Umbrella?

[TheFaQQer]

The agent recommended her to opt out, so she can be removed from being an employee from the client she will work for.

There's a surprise - opting in does not make you an employee, but it can give you more rights and make the agent do some more work.

In particular, opting out means they can restrict your ability to go direct in the future, plus whether they have to pay you or not.

Get her a first-timers guide and read up on it.

[DiscoStu]

There's a surprise - opting in does not make you an employee, but it can give you more rights and make the agent do some more work.

In particular, opting out means they can restrict your ability to go direct in the future, plus whether they have to pay you or not.

Get her a first-timers guide and read up on it.

I didn't think you could opt out if your were working through an umbrella? Than again, I have been known to be wrong on occasion

[NotAllThere]

Hmm ok I am a bit confused now... so if you are in an Umbrella company you are not inside IR35? Then shouldn't everyone be in an Umbrella?

T'other way round. If you are in an umbrella company you pay the same amount of tax whether you're in IR35 or not. And it's probably more than you'd pay as a ltd co in IR35.

[TheFaQQer]

I didn't think you could opt out if your were working through an umbrella? Than again, I have been known to be wrong on occasion

The opting in is based on the relationship between employee and the agency.

You can still opt in through an umbrella, but need to get the umbrella to opt in as well as you.

[malvolio]

T'other way round. If you are in an umbrella company you pay the same amount of tax whether you're in IR35 or not. And it's probably more than you'd pay as a ltd co in IR35.

Just to expand that slightly, IR35 is meant to ensure you pay the same tax as a permie (less a small amount for admin costs), if you are working as a permie. But if you work through an umbrella, you pay tax as a permie anyway because you are in effect employed by the umbrella. Therefore IR35 simply does not apply.

So through an umbrella you pay full tax on your income less the umbrella fees. However, inside IR35 but with your own company, you pay tax on 95% of your gross so you may wind up with more income at the end of the day than if you brolly it.