Avoiding IR35 by using Umbrella and LLP

[LisaContractorUmbrella]

It is nominal in that it never actually leaves my bank account. It is simply a journal from one company to another without an actual transfer of funds.

Then it is a completely artificial structure which our friends at HMR&C would be highly likely to view as avoidance

[Greg@CapitalCity]

Kick to the kerb

Just my opinion, but the days of using companies like this are gone. If you work in the UK, and earn money in the UK, then you pay tax in the UK. What you will probably find is if the company fell over, or their tax status was challenged by the tax office, all liability from the tax avoidance scheme would fall squarely on you. They probably won't tell you that, and it will probably be extremely difficult for you to work this out yourself from their T&C's. But that is probably why these companies go for the hard sell these days - its great for them - all the risk lies with you.

New clients come to us after having used these services because they couldn't get a mortgage when using complex tax structures. Another downside.

But seriously, why not work through a ltd company - go on the VAT flat rate scheme, claim your expenses correctly, and your take home pay will be 80-85% anyway. Plus, its legal.

[DaveB]

What is being offered to you is a tax avoidance scheme with the added 'selling point' of putting you outside IR35. If that is the only reason you would consider it, dont bother. There are easier and more realiable ways (see points 1 and 2 below).

How to avoid IR35.

Either -

1. Work through Brolly. You pay tax and NI like any other employee, no issues.

2. Work as a Ltd company then:

a. Get your contracts checked for IR35.
b. Work in a manner appropriate to a contractor supplying services, not an employee.
c. Take out any of the available insurances against investigation and penatlies. (optional)