Haya all!! PLEASE PLEASE I would be grateful for your advice if you could!!!
I have just accepted a £450 a day contract (my 1st one!) for 220 days in London (total 99k for the duration of the assignment - starting 7th July) in order to escape from a terrible workplace!!!! I was advised to set up my own company to maximize take home pay. Having read various threads in your forum, I asked for quotes.
Whilst trying to choose between SJD Accountancy (sister company to Contractor Umbrella), Pulse and Paystream to help me set up a Ltd company, Paystream sent me the below info stating 'IR35 does apply to the way you are working and as a result, you need to ensure that you legitimately fall outside IR35'. The companies I mentioned above all claim their accountants will sort this out for me...but a friend advised me that "Even if the accountant tells you it's alright, remember it will still be you who's responsible, not your accountant, if you are ever inspected by HMRC!! " I feel pretty intimidated now and I wonder whether I should give up on the idea of setting up my own company and go for the Umbrella solution instead?? any advice will be much much appreciated!!
(in case it would help any more newbies like me!):
"You have expressed an interest in using our IR35 review service. We have set out below exactly what our service entails and instruction on what you need to do next.
IR35 does apply to the way you are working and as a result, you need to ensure that you legitimately fall outside IR35. Otherwise, you face risk of HMRC investigation and the possibility of having to pay back any under paid tax (roughly, the difference between what you have paid, and what you would have paid as a PAYE worker), plus interest and potentially fines. Although you are responsible for ensuring you are working outside IR35, our service is designed to help you assess your IR35 status and to demonstrate that you took reasonable endeavours in making the right decision.
Our service
We will review your agency ‘contract for service’ and if you have a copy, the contract between your agency and client. If you are working direct to your client, we can also review this contract. We will advise you whether the contract assists you to fall outside IR35 or whether there are weaknesses with the contract that increases your risk with IR35. If there are weaknesses, where possible we will advise you on how to improve the contract from an IR35 perspective.
We will also carry out a review on your working practices. We will advise you, based on the information you provided, whether you are working consistently outside IR35 or whether there are weaknesses. We will make you aware of any weaknesses and where possible give you practical advice on how to improve your working practices from an IR35 perspective.
In May 2012 HMRC introduced their so called Business Entity Tests which may be used by HMRC to target businesses that they wish to review from an IR35 perspective. It is based on a points system and although a medium or high risk score does not put you automatically inside IR35, it does mean that HMRC are more likely to open an IR35 enquiry against you than if you scored in the low risk category. If you want further information and to complete the Business Entity Tests, then please complete the attached form.
Instruction on what you need to do
You need to send us a copy of the contract(s) and you will need to complete our IR35 Evaluation Form, which is attached to this email. So that we can understand your working practices as much as possible, we ask that you provide detailed information. We also request that you send us the contract and IR35 Evaluation Form at the same time.
Disclaimer
The nature of the IR35 legislation is such that it is based substantially upon subjective analysis of the facts and interpretation at the time. For these reasons, you agree that our assessment and any assistance we provide on the business entity tests act only as a guide based on the facts as you have presented them to us, and that the ultimate responsibility for liabilities, interest and penalties remains with you.
Additionally, please note that the business entity tests have only recently been introduced and, while the theory behind them is clear, we are currently unsure of how HMRC will seek to apply these in practice. We cannot accept any responsibility for how HMRC may choose to test the answers that are given. "
I have just accepted a £450 a day contract (my 1st one!) for 220 days in London (total 99k for the duration of the assignment - starting 7th July) in order to escape from a terrible workplace!!!! I was advised to set up my own company to maximize take home pay. Having read various threads in your forum, I asked for quotes.
Whilst trying to choose between SJD Accountancy (sister company to Contractor Umbrella), Pulse and Paystream to help me set up a Ltd company, Paystream sent me the below info stating 'IR35 does apply to the way you are working and as a result, you need to ensure that you legitimately fall outside IR35'. The companies I mentioned above all claim their accountants will sort this out for me...but a friend advised me that "Even if the accountant tells you it's alright, remember it will still be you who's responsible, not your accountant, if you are ever inspected by HMRC!! " I feel pretty intimidated now and I wonder whether I should give up on the idea of setting up my own company and go for the Umbrella solution instead?? any advice will be much much appreciated!!
(in case it would help any more newbies like me!):
"You have expressed an interest in using our IR35 review service. We have set out below exactly what our service entails and instruction on what you need to do next.
IR35 does apply to the way you are working and as a result, you need to ensure that you legitimately fall outside IR35. Otherwise, you face risk of HMRC investigation and the possibility of having to pay back any under paid tax (roughly, the difference between what you have paid, and what you would have paid as a PAYE worker), plus interest and potentially fines. Although you are responsible for ensuring you are working outside IR35, our service is designed to help you assess your IR35 status and to demonstrate that you took reasonable endeavours in making the right decision.
Our service
We will review your agency ‘contract for service’ and if you have a copy, the contract between your agency and client. If you are working direct to your client, we can also review this contract. We will advise you whether the contract assists you to fall outside IR35 or whether there are weaknesses with the contract that increases your risk with IR35. If there are weaknesses, where possible we will advise you on how to improve the contract from an IR35 perspective.
We will also carry out a review on your working practices. We will advise you, based on the information you provided, whether you are working consistently outside IR35 or whether there are weaknesses. We will make you aware of any weaknesses and where possible give you practical advice on how to improve your working practices from an IR35 perspective.
In May 2012 HMRC introduced their so called Business Entity Tests which may be used by HMRC to target businesses that they wish to review from an IR35 perspective. It is based on a points system and although a medium or high risk score does not put you automatically inside IR35, it does mean that HMRC are more likely to open an IR35 enquiry against you than if you scored in the low risk category. If you want further information and to complete the Business Entity Tests, then please complete the attached form.
Instruction on what you need to do
You need to send us a copy of the contract(s) and you will need to complete our IR35 Evaluation Form, which is attached to this email. So that we can understand your working practices as much as possible, we ask that you provide detailed information. We also request that you send us the contract and IR35 Evaluation Form at the same time.
Disclaimer
The nature of the IR35 legislation is such that it is based substantially upon subjective analysis of the facts and interpretation at the time. For these reasons, you agree that our assessment and any assistance we provide on the business entity tests act only as a guide based on the facts as you have presented them to us, and that the ultimate responsibility for liabilities, interest and penalties remains with you.
Additionally, please note that the business entity tests have only recently been introduced and, while the theory behind them is clear, we are currently unsure of how HMRC will seek to apply these in practice. We cannot accept any responsibility for how HMRC may choose to test the answers that are given. "
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