The Good, The Bad and The Ugly!

**malvolio** · 3 April 2006, 09:02

You haven't been reading very carefully then. Do not use a managed Ltd, that's just silly. Use an umbrella if you don't want any hassle and would prefer to be an employee (which is why they can ignore IR35) and if you must, general opinion is to use Parasol.

Or, use your own LtdCo and take 95% of everything you earn rather than 95% of everything the umbrella earns less their fees. The idea is maximise income, remember, so paying someone else to do 4 hours bookeeping a year is a pathetic way of acheiving that objective (if you are IR35'd, that's about all it takes.)

And IR35 is a voluntary tax. Are you absolutely sure you're caught? Current PCG numbers seem to indicate around 99.86% aren't...

**kimera** · 3 April 2006, 09:41

cheers pal, always straight to the point and factual

Im "caught by IR35" as per the government def. ie one place of work, one source of income etc etc. more than that i dont know! Ill let the brolly take care me thinks. For what it costs the convenience factor wins over!

**John Galt** · 3 April 2006, 12:09

Originally posted by kimera

I read a hell of a lot of negative feedback on here re umbrellas/manage ltds etc and this is very very useful. What I dont see is positive thoughts and recomendations for the good guys out their.

At the moment top of my list is Parasol IT after reading that my former first choice Prosperity4 are, shall we say "not that good".

Im looking to set up an umbrella or managed ltd shortly (I will fall into IR35) and need some pointers on who should get my business.

I use ContractorUmbrella and they have always been really good

**ASB** · 3 April 2006, 12:42

Originally posted by kimera

cheers pal, always straight to the point and factual

Im "caught by IR35" as per the government def. ie one place of work, one source of income etc etc. more than that i dont know! Ill let the brolly take care me thinks. For what it costs the convenience factor wins over!

Assuming you are genuinely caught then the main question is "are the fees less than the cost of running my LTD".

The latter is likely to cost a minimum of 900 p.a. if you use an online accountant or 15 p.a. if you do it yourself.

However a couple of advantages to your own ltd may be applicable depending on circumstances.

- There is a small saving because you personally are taxed on 95% of earnings.
- With A day you may be able to mitigate the tax situation by heavy duty pension planning. If you only need a small proportion of your income to live on you could put the rest into employer contributions into your pension. [Most umbrellas will offer this but you may have less options]

BTW none of the reasons you have cited as caught actually make you so. None of those are in any way determinative.

**Mordac** · 3 April 2006, 13:24

Originally posted by kimera

cheers pal, always straight to the point and factual

Im "caught by IR35" as per the government def. ie one place of work, one source of income etc etc. more than that i dont know! Ill let the brolly take care me thinks. For what it costs the convenience factor wins over!

Never believe anything the governemt says. They understand less about their own crap legislation than almost anyone else. A quick read of some of the case law (e.g. Lime IT) will tell you that. Never assume you're caught, and never ask the IR if you are, because they'll always tell you that you are and then it's an uphill struggle to prove that you aren't.
Neither of these points are IR35 indicators, what counts is a real Right of Substitution, MOO and control (the lack of).

The Good, The Bad and The Ugly!