Not an umbrella but HMRC safe?

[Tyger]

Hi All

I've been looking at an org and considering their services with regards to a contract role

Essentially, retaining self employed status and sub contracted out via this company to the agency - therby claiming a greater return than an umbrella company eg. 70%.

I'm trying to get some views on what you guys think - I'm new to all of this and don't want Hector knocking on my door in a few years as they are based on the Isle of Man.

Any advice appreciated

[northernladuk]

What do you mean by HMRC safe?

[Tyger]

What do you mean by HMRC safe?

Hi

All I'm trying to determine is if this is all above board or not?

Ta

[cojak]

Never heard of them.

I guess it depends on your own risk assessment, if you're relaxed about it and view getting investigated by the HMRC as a long-shot (which as now become a good bit shorter since you've placed the company on this board and we know HMRC reads it too) or you're risk averse and go the Ltd/accountant route which would still give you more than an umbrella.

The choice, as they say, is yours.

[Ignis Fatuus]

Leaving aside for a moment my twitching nose that tells me that new posters who ask what we think about a scheme usually end up trying to sell it, I am curious about where the advantage lies in being self-employed rather than being employed by an umbrella company. You still have to pay tax. You still have to pay NICs (and can't pay dividends). You are still liable to fall under IR35.

How do you get a greater return? That is the real question, not whether subcontracting as self-emplyed is legitimate. The answer must be that you don't pay all the tax and/or NICs that HMRC think you should. I suspect that also answers the question of whether it is HMRC-safe.

[Vallah]

Sounds like what he's talking about is a gross pay solution maybe? So it would still be OK with HMRC as it's not an EBT scheme or similar. Those schemes would possibly give you better returns than umbrella schemes I guess as being self employed you can claim a wider range of expenses (the wholly, necessarily and exclusively thing). If it's not one of those, then I don't know.

[ASB]

Leaving aside for a moment my twitching nose that tells me that new posters who ask what we think about a scheme usually end up trying to sell it, I am curious about where the advantage lies in being self-employed rather than being employed by an umbrella company. You still have to pay tax. You still have to pay NICs (and can't pay dividends). You are still liable to fall under IR35.

How do you get a greater return? That is the real question, not whether subcontracting as self-emplyed is legitimate. The answer must be that you don't pay all the tax and/or NICs that HMRC think you should. I suspect that also answers the question of whether it is HMRC-safe.

In the traditional model involving contractor, agency, client it is probably impossible to be self employed. In terms of self employed to an actual client this is generally possible (though unusual for a number of reasons).

However, if one actually is self employed then one pays a slightly different NI structure which does involve less NI being handing over - so the potential for a greater retention does exist.

Further, in the case of being employed by an overseas company there are questions as to what NI may be payable anyway. It depends upon the exact arrangements, whether the employer has a branch and a number of other things.