Contract Advice - Self Employed or Limited Company?

[deeniguy]

Thanks ever so much for the promt advice guys. Right, so i used to be on 25k when i was a permanent employee 2 mnths ago. I did forget to add that around 10 of us employees left with a compromise agreement before we got an official letter of redundancy. So we all left with an ex gratia payment. Now from what i understand, if i were to work under my ltd company for my previous employer, i will be liable to pay tax on my redundancy pay? If im likely to be caught within IR35 then would contracting as a self-employed be the best way if i take my old job back?

[northernladuk]

I'd have no issues and in fact the first gig I was going to take after starting as a contractor was my previous employer. I see no issues with it at all providing the boxes are all ticked.

Boo2

It's not you that sees the issues with it.......

[LisaContractorUmbrella]

There's no ******* way I'd work for that.


I'd have no issues and in fact the first gig I was going to take after starting as a contractor was my previous employer. I see no issues with it at all providing the boxes are all ticked.

Boo2

Did you go back as sole trader, Ltd or brolly

[deeniguy]

Thanks ever so much for the promt advice guys. Right, so i used to be on 25k when i was a permanent employee 2 mnths ago. I did forget to add that around 10 of us employees left with a compromise agreement before we got an official letter of redundancy. So we all left with an ex gratia payment. Now from what i understand, if i were to work under my ltd company for my previous employer, i will be liable to pay tax on my redundancy pay? If im likely to be caught within IR35 then would contracting as a self-employed be the best way if i take my old job back?

Guys any advice?

Should i go ahead with being self-employed instead?

[TheFaQQer]

Guys any advice?

Should i go ahead with being self-employed instead?

At the risk of taking NLUKs role on the site....

Are you sure that you're cut out for this? Working for yourself and / or running your own business requires some degree of self-starting and effort. Given that you can't even decide how to work, maybe you're best left as a permie.

[Wanderer]

10 of us employees left with a compromise agreement before we got an official letter of redundancy. So we all left with an ex gratia payment. Now from what i understand, if i were to work under my ltd company for my previous employer, i will be liable to pay tax on my redundancy pay?

Yes, if you got a tax free pay off then you can't go back to the employer(in theory at least)

To be honest, you should probably go and work elsewhere.

Working as self employed also leaves you with unlimited liability in the (admittedly unlikely) event that you get sued.

[TheFaQQer]

Im a network engineer and have never done contract work before. I was made redundant by my employer 2 months ago after 5 years of full service. They now want to recruit me as a contractor for 6 months @ 200GBP/Day. I have looked around and asked what should be my way to go about the finance. So i was told to avoid umbrella since im staying more than 3 months and my salary will be above 25k, so its more tax efficient to setup a LTD Company. I've been looking into it and had my mind set, but my old manager has advised its not required as he recommended to stay as a Self-Employed contractor. I would like to get your advice as it seems there's less hassle with being self employed, but i don't mind looking for an accountant and doing invoices for a few minutes a week, if i am able to get a higher take-home with the LTD company option. Any advice will be much appreciated.

I'd missed that bit.

I'd be talking to an employment lawyer - they made you redundant, but the role is clearly still there because they are now trying to get you in as a contractor to do the same work.

[SueEllen]

I'd missed that bit.

I'd be talking to an employment lawyer - they made you redundant, but the role is clearly still there because they are now trying to get you in as a contractor to do the same work.

WHS with bells on it.

Compromise agreement or not they cannot legally offer you your same job back in that way.

[malvolio]

I'd missed that bit.

I didn't: read my original reply...

I'd be talking to an employment lawyer - they made you redundant, but the role is clearly still there because they are now trying to get you in as a contractor to do the same work.

This too...

[MadDawg]

Assuming you want to go back...

If your ex-employer is happy, go self employed/sole-trader. Just phone the tax office and tell them you're self employed. You declare your income on your tax return (don't forget to put the tax aside!)

You pay less NI than a brolly (but more than if you were outside IR35 ltd - but it looks very unlikely that you could argue that you were outside IR35).

I wouldn't worry about being taxed on the redundancy pay - there's been a two month break, and presumably the contract isn't open-ended, i.e. you'll reach a point where you're not working for that company?


If they want/need you, push for a bit more than £200. Go in at £250 - if you don't ask, you don't get.

As others have said, your safest bet is to get a job elsewhere. However, if that's proving difficult (and I'm guessing if you've been out of work for 2 months you've been looking) then if I were you I'd take it, self-employed, and not worry too much.