Public sector direct contracting.. best method?

[BradMcA]

Hi,

I have been a Ltd and Umbrella contractor via an agency, now I find myself at a university within IR35 without agency involvement... is it best for me to invoice the uni and be paid net to my personal bank account as an individual with the required insurances personally or get an umbrella company involved again?

[northernladuk]

What are they willing to do? Will they really go for a payment to a personal account? Ask them what they are willing to accommodate?

[jamesbrown]

I doubt they'd be willing to do this because, if the relationship is factually akin to employment (as might be argued if they were to otherwise classify the contract as inside IR35), it exposes them to the consequences of not applying PAYE/NI correctly. However, to answer your question directly, yes, you'd be better off as a sole trader, providing that you're willing to expose your personal assets.

More than likely, it isn't an option.

[cojak]

I doubt they'd be willing to do this because, if the relationship is factually akin to employment (as might be argued if they were to otherwise classify the contract as inside IR35), it exposes them to the consequences of not applying PAYE/NI correctly. However, to answer your question directly, yes, you'd be better off as a sole trader, providing that you're willing to expose your personal assets.

More than likely, it isn't an option.

That means your house, car and any savings you might have if HMRC come knocking.

Just to make it clear.

[BradMcA]

Thanks for the chilling response , is this not what professional indemnity insurance is for to safeguard against though?

That means your house, car and any savings you might have if HMRC come knocking.

Just to make it clear.

[jamesbrown]

That means your house, car and any savings you might have if HMRC come knocking.

Just to make it clear.

Sure, but why HMRC? I'm talking about business risk. Notwithstanding contractual clauses, it would be the responsibility of the university to deal with HMRC if they were accused of false self-employment. That's the point. That's why they're unlikely to do this.

[jamesbrown]

Thanks for the chilling response , is this not what professional indemnity insurance is for to safeguard against though?

A particular type of business risk, yes (i.e. when you do something, professionally, that causes harm). Even then, there are policy limits etc. Remember, you have unlimited liability, in principle, as a sole trader.

[BlasterBates]

Operating as a sole trader is easier admin wise, I would ignore the more doom laden advice, as there are several million sole traders in the UK not facing personal financial ruin.

An introduction:

https://www.theguardian.com/small-bu...any-freelances

[Whorty]

Wouldn't brollie be better as the OP could put money straight into a pension thus saving tax at source? Easier admin too?

[northernladuk]

Wouldn't brollie be better as the OP could put money straight into a pension thus saving tax at source? Easier admin too?

Yep but very few allow more than the minimum. Contractor Umbrella have a good setup.