• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

Difference between inside and outside contracts for Umbrella company route

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    Difference between inside and outside contracts for Umbrella company route

    I have two offers (Inside IR35 - £550 and Outside IR35 - £550) but as per my situation (Claimed entrepreneurs tax relief last year) I will have to go through an Umbrella company. If we go through an umbrella is there any difference between the inside and outside contract rates? Would the take home pay be the same? I heard we don't need to pay Employer's NI for the Outside IR35 contract (Public sector), can someone please explain if this is possible? Thanks

    #2
    Originally posted by indianguy View Post
    I have two offers (Inside IR35 - £550 and Outside IR35 - £550) but as per my situation (Claimed entrepreneurs tax relief last year) I will have to go through an Umbrella company. If we go through an umbrella is there any difference between the inside and outside contract rates? Would the take home pay be the same? I heard we don't need to pay Employer's NI for the Outside IR35 contract (Public sector), can someone please explain if this is possible? Thanks
    If you have gone through MVL, then you will have to use an umbrella (and be inside). It will be 2 years before you can use a Ltd (and accept outside contracts) for the same line of work.

    People only use MVL if they move from contracting to permanent employment.
    "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
    - Voltaire/Benjamin Franklin/Anne Frank...

    Comment


      #3
      Originally posted by indianguy View Post
      I have two offers (Inside IR35 - £550 and Outside IR35 - £550) but as per my situation (Claimed entrepreneurs tax relief last year) I will have to go through an Umbrella company. If we go through an umbrella is there any difference between the inside and outside contract rates? Would the take home pay be the same? I heard we don't need to pay Employer's NI for the Outside IR35 contract (Public sector), can someone please explain if this is possible? Thanks
      if you use an umbrella, IR35 is no longer relevant. You will pay PAYE tax and NICs.
      See You Next Tuesday

      Comment


        #4
        Originally posted by cojak View Post

        If you have gone through MVL, then you will have to use an umbrella (and be inside). It will be 2 years before you can use a Ltd (and accept outside contracts) for the same line of work.

        People only use MVL if they move from contracting to permanent employment.
        I think he knows that as he's already stated he needs to use a brolly. Technically, using a brolly doesn't make the gig inside though does it? He can still have an SDS stating outside but go through a brolly. Not sure that level of pedantry makes any difference whatsoever but it's still worth being technically accurate with the sitaution?
        'CUK forum personality of 2011 - Winner - Yes really!!!!

        Comment


          #5
          Originally posted by northernladuk View Post

          I think he knows that as he's already stated he needs to use a brolly. Technically, using a brolly doesn't make the gig inside though does it? He can still have an SDS stating outside but go through a brolly. Not sure that level of pedantry makes any difference whatsoever but it's still worth being technically accurate with the sitaution?
          Thank you. Yes, thats my exact question. Also is there a way to pay back the tax relief that I received so that I can open another limited company? or would that open another can of worms?

          Comment


            #6
            Originally posted by indianguy View Post

            Thank you. Yes, thats my exact question. Also is there a way to pay back the tax relief that I received so that I can open another limited company? or would that open another can of worms?
            Someone touted that as an option on a different thread and got shot down. Where there might be something in the theory I can't believe HMRC are going to be pleased you've used a mechanism and then backtracked when it suits you to pay less tax to them.

            IMO you've made the decision, gained a very tasty tax advantage so now have to see it through. Lets call it a tax on short sighted thinking. You aren't the first and judging by the number of knee jerk MVL posts we've seen I am sure there is going to be many many more to come.
            'CUK forum personality of 2011 - Winner - Yes really!!!!

            Comment


              #7
              Originally posted by indianguy View Post

              Thank you. Yes, thats my exact question. Also is there a way to pay back the tax relief that I received so that I can open another limited company? or would that open another can of worms?
              It looks like you probably can, but you'll need the advice of an accountant to make sure you don't get on the wrong side of HMRC, as the tax will need to be refunded, and potentially you could face penalties.

              https://www.businessrescueexpert.co....y-liquidation/
              I'm alright Jack

              Comment


                #8
                Originally posted by northernladuk View Post

                Someone touted that as an option on a different thread and got shot down. Where there might be something in the theory I can't believe HMRC are going to be pleased you've used a mechanism and then backtracked when it suits you to pay less tax to them.

                IMO you've made the decision, gained a very tasty tax advantage so now have to see it through. Lets call it a tax on short sighted thinking. You aren't the first and judging by the number of knee jerk MVL posts we've seen I am sure there is going to be many many more to come.
                Agree, I accept my short sighted action and go with the Umbrella option.

                Comment


                  #9
                  And your 550 a day becomes 286 in your pocket

                  Comment


                    #10
                    Originally posted by cojak View Post

                    If you have gone through MVL, then you will have to use an umbrella (and be inside). It will be 2 years before you can use a Ltd (and accept outside contracts) for the same line of work.

                    People only use MVL if they move from contracting to permanent employment.
                    If you have "struck off a LTD company" does this rule about 2 years can go back to and acceptable contracts apply?

                    Comment

                    Working...
                    X