Inside/Outside IR35 comparison

[Gomez]

...so not an easy thing to do judging by previous discussion. Many variables. I am trying to weigh up £670pd outside (caught by 24 month rule) against £800pd inside. Both can be considered to have equal expenses working away from home base. My initial feeling is that the £800 is not enough but I need to go crunch some numbers. Anyone else have any feedback from a similar decision they've had to make?

[PerfectStorm]

...so not an easy thing to do judging by previous discussion. Many variables. I am trying to weigh up £670pd outside (caught by 24 month rule) against £800pd inside. Both can be considered to have equal expenses working away from home base. My initial feeling is that the £800 is not enough but I need to go crunch some numbers. Anyone else have any feedback from a similar decision they've had to make?

The inside might be worth about £10-£20 more a day to you, all said and done.

However - if truly 'outside' - you may prefer the autonomy, lack of being 'part of the company', lack of obligation and so on that comes with being 'Outside'

If you think that the inside gig gives you all that too you might want it. If not...

[WordIsBond]

So many variables. What are average expenses? If your expenses are £5K a month you are going to have a lot of taxes with the outside gig, too, so the benefit of being outside is lessened. If they are £500 / month, not so much.

How much pension contribution are you making? Interested in increasing it?

How much money (dividends and salary) do you need to take out? If you are going into higher rate on divs, being outside is worth less.

And so on....

Without knowing all those variables, you can't really compare the two.

[northernladuk]

It's not an easy thing to do.

HTH

[tarbera]

you means the 24 month expense rule?

...so not an easy thing to do judging by previous discussion. Many variables. I am trying to weigh up £670pd outside (caught by 24 month rule) against £800pd inside. Both can be considered to have equal expenses working away from home base. My initial feeling is that the £800 is not enough but I need to go crunch some numbers. Anyone else have any feedback from a similar decision they've had to make?

you means the 24 month expense rule?

Just ask your client to settle your hotel/travel bills directly for a reduction in your daily rate - job done

[malvolio]

Inside IR35 is no expenses of course. But if you've blown the 24 month limit that doesn't really matter.

But the main (and usually forgotten) benefit of outside gigs is the ability to mange your income far more effectively than simply dumping 95% of your gross in your personal account less tax. Dividends are trivial, but non-subsistence expenses, war-chest building, far better pensions savings, cheaper life insurance and several other things are not to be ignored.

[quackhandle]

Bare in mind HMRC have said there is a possibility that if you work Inside, they may want to chat to you about previous contracts to see if they can squeeze some more tax out of you.

qh

[SeanT]

Take the outside unless you're putting most of it in a pension

[fidot]

Bare in mind HMRC have said there is a possibility that if you work Inside, they may want to chat to you about previous contracts to see if they can squeeze some more tax out of you.

qh

When/where did hey say this please?

[pauldee]

Take the outside unless you're putting most of it in a pension

I don't understand this: why would being inside IR35 be a positive if your're putting most of it in a pension?