Contractor with 2 IR35 Contracts

**malvolio** · 28 July 2022, 22:06

Ermmm... You can't*. You are taxed as an employee. You pay full taxes on your total income. That's what inside IR35 means.

How are you being paid - umbrella, two umbrellas, via YourCo (I hope not), company PAYE, agency PAYE..?

* Actually, not strictly true. You can lump money into your pension pot to keep your income under the threshold for higher rate. Snag with that is you can only put away so much, which may not be enough. And that depends on what pensions arrangements you have in place and what you have paid in over previous years.

**northernladuk** · 28 July 2022, 22:26

Do either of your clients know about the other one?

**jamesbrown** · 28 July 2022, 22:30

As alluded to above, there's really nothing much you can do, assuming you're already with an umbrella and salary sacrificing the maximum i.e., £40k per year, plus any unused allowance from up to three years prior (if you had a UK pension and didn't contribute the full amount in those years).

**ensignia** · 28 July 2022, 23:46

This thread will probably descend into people shouting about morals and ethics regarding your two simultaneous contracts, but the long and short of it is you can't really avoid the high tax with Inside roles.

You'll probably be paid via an umbrella company and taxed at source i.e. you'll pay full income tax, NI, Employer NI and apprenticeship levy on your rate. Whatever's left is paid to your personal bank account (usually about 54% of the gross).

Taking two Inside roles is definitely not ideal because, assuming you're on decent rates, you'll hit the 100k threshold quickly and start losing your personal allowance. At some point you'll hit exactly 50% take home and it'll only continue getting less as you earn more over the course of the financial year.

You could always try one of those dodgy schemes which pays you in the form of an unrepayable loan, but you'd have to be pretty stupid and egregious to do this.

To summarise, either suck it up and pay what you owe, or don't take on two simultaneous Inside contracts.

**jamesbrown** · 29 July 2022, 01:27

And you'd have to be pretty stupid to even suggest it.

**Fraidycat** · 29 July 2022, 03:15

Originally posted by SSD13 View Post

Hi All

Worked Outside IR35 Last year however difficult landing one this year and picked up 2 Inside IR35 (Tax is a B***H) as you can imagine

Any ideas on how I can save paying the 40-45% Tax Brackets

I am new to the IR35 Contracting obviously there are drawbacks in comparison to Outside IR35 just looking for some General advice

Apologies if posted in the wrong section of this forum

Appreciate your advice

You cant avoid the 40% band, but might be able to avoid the 45% band by paying the max amount into a pension.

If you pay 40K into a pension then you would need to earn around 210K in one tax year before hitting the 45% band.

I would just take lots of holidays after going over 210K, you would probably need to if working the stress of 2 contracts at the same time.

**cojak** · 29 July 2022, 06:57

Originally posted by ensignia View Post

This thread will probably descend into people shouting about morals and ethics regarding your two simultaneous contracts, but the long and short of it is you can't really avoid the high tax with Inside roles.

You'll probably be paid via an umbrella company and taxed at source i.e. you'll pay full income tax, NI, Employer NI and apprenticeship levy on your rate. Whatever's left is paid to your personal bank account (usually about 54% of the gross).

Taking two Inside roles is definitely not ideal because, assuming you're on decent rates, you'll hit the 100k threshold quickly and start losing your personal allowance. At some point you'll hit exactly 50% take home and it'll only continue getting less as you earn more over the course of the financial year.

You could always try one of those dodgy schemes which pays you in the form of an unrepayable loan, but you'd have to be pretty stupid and egregious to do this.

To summarise, either suck it up and pay what you owe, or don't take on two simultaneous Inside contracts.

In this instance moralising is a moot point, the tax situation is the real point that the OP will realise about 6 months into his contracts.

(But at least only the two Umbrellas will know about his arrangements).

**porrker** · 29 July 2022, 08:36

I'd be more worried about my contractual position! Outside contracts state 'This is not exclusive arrangement', Give no working times, nor give a location that the work needs to be performed at. Do both your inside contracts have such clauses omitted.

Also two Umbrellas wont be able to use your tax code. One of them will have to apply for a special tax code so you need to explain to one of them you have another contract through another Umbrella and depending on the clauses they need to flow down to you as above may put them in a sticky position.

Good luck i'd be interested to find out how that pans out.

**SSD13** · 29 July 2022, 08:43

Hi thanks for the reply

One Contract is due to end in the next 2 Months so I am planning to just do one inside and pick up one outside. From my tax perspective I am on D1 and K Codes if that makes any sense.
The Pension idea sounds the best route currently and I will look into this.

Contractor with 2 IR35 Contracts