Newbie - About to start off as a contractor but I might be in the IR35?

[TheCyclingProgrammer]

Logically, although the employer could give instruction, they are in no position to supervise or control what the worker is doing as they are not there to witness it. HMRC recognise this and have, for example, deliberately excluded workers who always work at home from the recent changes to the Agencies Legislation. As Platypus says - this is all opinion based on case law that's available.

I see where you are coming from but does being able to ignore said direction and control get you out of it that easily? If you are ignoring what the client says without good cause then I can't see the contract lasting very long...

[TheCyclingProgrammer]

Thank you all so much for your responses. The overseas company does indeed not mind if I operated as a sole trader or under a ltd. So I would be able to get away with working as a sole trader.

I will indeed get a professional to look through the contract to make 100% sure I don't site inside the IR35.

You should. It's not hard to put yourself outside IR35 with the right contract and working practices, as long as the client is willing to play ball.

However you operate, make sure you get professional indemnity insurance and make sure it covers you (or YourCo) when working for your overseas client.

[jamesbrown]

Remember the basic elements of D&C: where, when, what and how. Working at home may help with the where (and possibly when), but teleworking isn't limited to foreign clients. It may be more difficult to conduct an investigation. Since when has HMRC been pragmatic?

It comes down to what is the best advice for someone with a similar arrangement to the OP. The best advice is to treat the scenario like any other and not to be complacent.

[Platypus]

Bearing in mind my simple revenue stream, little to no expenses and the fact I will be making £38k in the year I assume, if I were to sit outside the IR35, setting up an ltd would be most cost efficient course of action?

In this case, I'd operate as a sole trader and save the bother (and expense) of a limited company (i.e. retaining an accountant).

At £38k per year you're facing 20% income tax vs. 20% corporation tax and small NI for zero NI.

On balance, I think you'd be better off as a sole trader, but I'd also run the numbers if I were you.