Always under IR35 - should I still go umbrella?

[Sockpuppet]

Thanks for all the answers, I think I will go for Crunch.

However I have another question. When I joined CU, they told me I had to get at least two contracts with them if I wanted to have expenses. They said that if I only took one contract with them it would be as if I had been a permanent worker there, so I wouldn't be able to expense anything.

For the purpose of having HMRC off by back, does an extension count as a second contract? And what about if I take another contract, then agree with the agency that after a month we will terminate the contract and do another immediately under my new Ltd?

No,it would be two workplaces you need for this.

[Wanderer]

However I have another question. When I joined CU, they told me I had to get at least two contracts with them if I wanted to have expenses. They said that if I only took one contract with them it would be as if I had been a permanent worker there, so I wouldn't be able to expense anything.

The rule is that it must have been your expectation that you would work multiple engagements. It doesn't matter if that expectation doesn't match the reality.

This advice may be controversial but I wouldn't tell the umbrella you are forming a LTD company. You want to get your final pay before they find out that you may not be taking another engagement through them. There have been stories of people having money withheld because the umbrella things your expenses are somehow retrospectively "invalidated" by not taking multiple assignments.

[malvolio]

The rule is that it must have been your expectation that you would work multiple engagements. It doesn't matter if that expectation doesn't match the reality.

This advice may be controversial but I wouldn't tell the umbrella you are forming a LTD company. You want to get your final pay before they find out that you may not be taking another engagement through them. There have been stories of people having money withheld because the umbrella things your expenses are somehow retrospectively "invalidated" by not taking multiple assignments.

That's because they are. One engagement as an employee of an umbrella, where is your permanent workplace?

The "expectation" excuse only works for the first contract. As soon as it's clear there won't be another one through that employer, it's no longer an expectation.

[zecontractor]

Ok, so I can't get out via the extension route.

What about after a take a second contract with another client (and with CU), work there for a month and quit on Friday, then sign the contract again with my new Ltd on Monday? I'm assuming I can convince the agency to do this.

Is this legit? I would think so, since I've heard some stories about people quitting their former permanent jobs on Friday and starting work as contractors on Monday...

[malvolio]

Ok, so I can't get out via the extension route.

What about after a take a second contract with another client (and with CU), work there for a month and quit on Friday, then sign the contract again with my new Ltd on Monday? I'm assuming I can convince the agency to do this.

Is this legit? I would think so, since I've heard some stories about people quitting their former permanent jobs on Friday and starting work as contractors on Monday...

Where to start....

[northernladuk]

Where to start....

How about suggesting he stays brolly?

[Wanderer]

That's because they are. One engagement as an employee of an umbrella, where is your permanent workplace?

The "expectation" excuse only works for the first contract. As soon as it's clear there won't be another one through that employer, it's no longer an expectation.

Sure, but that doesn't mean that the expenses are retrospectively invalidated. It just means that from that time onwards the worker can't claim the expenses through the umbrella.

[malvolio]

Sure, but that doesn't mean that the expenses are retrospectively invalidated. It just means that from that time onwards the worker can't claim the expenses through the umbrella.

No, it mean he has only ever had one workplace so clearly any expenses claimed are subject to tax as a BIK. If you haven't paid them, you need to correct that in the annual SAR; not doing so is evasion.

[LisaContractorUmbrella]

How about suggesting he stays brolly?

Excellent idea

[Wanderer]

No, it mean he has only ever had one workplace so clearly any expenses claimed are subject to tax as a BIK. If you haven't paid them, you need to correct that in the annual SAR; not doing so is evasion.

So, imagine a worker makes legitimate claims for travel and subsistence while working via an umbrella for a client on a 12 month contract with the reasonable expectation that the contract won't continue past 12 months and that this won't be their only engagement while working for the umbrella.

At the end of the 12 months, the worker has a change of heart and decides not to take further engagements through the umbrella starts their own business/goes permie/whatever.

What is the worker to do now? Do they declare all their expenses for the past 12 month contract on their SAR as a BIK OR do they just stop claiming from the moment they knew (or could have reasonably been expected to know) they would not take multiple engagements?

Lisa, feel free to answer that one too.