IR35 has freaked out a newbie !!!

**DaveB** · 20 July 2012, 08:38

Originally posted by Derben View Post

Hi,

I have set up a limited company, me being the Director and my Wife as Secretary (though I'm not sure why I bothered as I won't be paying her and all shares are allocated to me). So it's just me doing contract work...

Anyway, been offered a contract where I could be located anywhere based on need (i.e. couple of months down south, couple of months up north, etc). Contract is six months.

Reading about the IR35 has completely freaked me out to the point where I'm not sure if taking the contract route is right for me - looks like I could fall "within IR35". I've been told I'll be okay as long as I don't work for the company long term (i.e. stick to short contracts). Regardless of that, I'm not convinced that will be the case as it sounds like I'm being treated as a permy - i.e. located with demand.

Is there anyway I can confirm if the IR35 affects me and should I calm down

Yes there is and yes you should.

Get your contract checked out by the likes of QDOS, Abbey or Bauer and Cottrell and get them to negotiate any appropriate changes. Take their advice regarding working practices.
Join the PCG with PCG+ Membership and/or take out IR35 insurance with the above.
Calm Down.

**SimonMac** · 20 July 2012, 08:38

Originally posted by Derben View Post

Hi,

I have set up a limited company, me being the Director and my Wife as Secretary (though I'm not sure why I bothered as I won't be paying her and all shares are allocated to me). So it's just me doing contract work...

Anyway, been offered a contract where I could be located anywhere based on need (i.e. couple of months down south, couple of months up north, etc). Contract is six months.

Reading about the IR35 has completely freaked me out to the point where I'm not sure if taking the contract route is right for me - looks like I could fall "within IR35". I've been told I'll be okay as long as I don't work for the company long term (i.e. stick to short contracts). Regardless of that, I'm not convinced that will be the case as it sounds like I'm being treated as a permy - i.e. located with demand.

Is there anyway I can confirm if the IR35 affects me and should I calm down

Unfortunatly IR35 cannot be easily summed up in a few easy statements, my first advice would be get the contract reviewed (I personally use QDOS), secondly the majority of IR35 is based on working practices, you say you can be sent to multiple locations is it for the same project each time but just a different client location? If so I believe this is fine, if you move around different projects I think this is less good news, however even if you are "caught" the extra salary is much more than permiedom so I wouldn't worry about quitting contracting just yet.

**Craig@Clarity** · 20 July 2012, 08:42

Hi Derben,

In a lot of the cases, I'd say get into the contract first and then assess your actual working conditions and relationship with the end user to determine your employment status. There's lots of guides out there to help you have a brief understanding of IR35. Try having a look at QDos and PCG (Professional Contractors Group) for free guides and templates.

If at the end of the day, you are caught by IR35, it just means that you'll end up having to pay income tax and NIC on the profit you make under that contract. Doesn't mean future contracts are caught since it is on a contract per contract basis (not to be confused with a renewal/extension of a contract though).

Hope this helps.

**LisaContractorUmbrella** · 20 July 2012, 09:03

As a contractor you will find some contracts are inside IR35 and some are outside - develop your negotiating skills so that you always end up with a net income that you feel reflects your worth

**BolshieBastard** · 20 July 2012, 10:18

Originally posted by Derben View Post

Hi,

I have set up a limited company, me being the Director and my Wife as Secretary (though I'm not sure why I bothered as I won't be paying her and all shares are allocated to me). So it's just me doing contract work...

Anyway, been offered a contract where I could be located anywhere based on need (i.e. couple of months down south, couple of months up north, etc). Contract is six months.

Reading about the IR35 has completely freaked me out to the point where I'm not sure if taking the contract route is right for me - looks like I could fall "within IR35". I've been told I'll be okay as long as I don't work for the company long term (i.e. stick to short contracts). Regardless of that, I'm not convinced that will be the case as it sounds like I'm being treated as a permy - i.e. located with demand.

Is there anyway I can confirm if the IR35 affects me and should I calm down

IR35 is not nice and you can take steps to lessen the chances of being inside it. But, you will be better off even if IR35 caught than as a permie. (Always assuming of course you dont work for a ridiculously low rate!)

**psychocandy** · 20 July 2012, 10:22

So you set up company, got contract and THEN heard about IR35? weird.

**northernladuk** · 20 July 2012, 22:08

Op really needs to go read the How to search thread in the welcome section. Nothing he has asked couldn't have been answered without a little bit of research done first.

**malvolio** · 21 July 2012, 07:24

Originally posted by northernladuk View Post

Op really needs to go read the How to search thread in the welcome section. Nothing he has asked couldn't have been answered without a little bit of research done first.

Try a Google for "The potted guide to IR35".

**Derben** · 24 July 2012, 05:43

Any other newbies out there. I am a good example of how NOT to do your first contract.

My mistakes to learn from...

a) I accepted a lower rate just to get on in to the market. Other colleagues starting out got around £50 - £100 a day more than me (and I frickin' trained them up).

b) My first contract clearly fell in to IR35 and I should have researched it more - and ignored some other contractors who told me "not to worry about it - you'll be fine". Clearly not. This forum has been more useful than any "across the desk" advice. There are also plenty of accountants which give free initial advice - I took advantage of this too late.

c) Always take whatever an agency says with a "big pinch of salt". They're definately not your friend.

d) Don't get caught up with claiming back expenses from your company. It's a good idea but it's still YOUR money and not the companies at the end of the day.

I rushed in to all of this from losing a permanent job - granted, it only took me a month to find a contract. But I wish I had calmed down, enjoyed the time off and done a bit more research around the actual lifestyle of contracting first.

IR35 has freaked out a newbie !!!