using umbrella co, do i need to check contract in IR35?

[young veteran]

Hi all, this probably a stupid question but to clarify a bit of confusion for me, do i need to get my contract checked to see if its in IR35 if i am going through an umbrella company - cos they have said they sort out all my tax etc etc and are soley responsible to the taxman??

[malvolio]

Not really. Since you are effectively a full time employee of the umbrella, as far as the taxman is concerned, and paying full PAYE and NICs anyway, there's little point in chasing you for an IR35 failure.

[young veteran]

satisfied,

cheers malvolio

[ASB]

To go a little further than malvolio.

If you are paid purely PAYE then as a matter of law IR35 cannot possibly apply.

IR35 can only kick in if you are paid other than PAYE (dividends generally) and you own more than 5% of the share capital of the potential intermediary.

[Spacecadet]

To go a little further than malvolio.

If you are paid purely PAYE then as a matter of law IR35 cannot possibly apply.

IR35 can only kick in if you are paid other than PAYE (dividends generally) and you own more than 5% of the share capital of the potential intermediary.

so if i owned less than 5% of my own LTD co then i would be IR35 safe?

[timh]

so if i owned less than 5% of my own LTD co then i would be IR35 safe?

Surely not.. Otherwise I could employ permatemp contractors, give them 1% and pay them mostly in expenses and dividends! Would that make me a MSC?

[Spacecadet]

Surely not.. Otherwise I could employ permatemp contractors, give them 1% and pay them mostly in expenses and dividends! Would that make me a MSC?

I would have thought that only owning 5% meant that I would only get 5% dividends, the other 95% going to the majority shareholder, who just by coincidence could be my wife

[oraclesmith]

Surely not.. Otherwise I could employ permatemp contractors, give them 1% and pay them mostly in expenses and dividends! Would that make me a MSC?

If they all got 1%, they would get an equal 1% share of company profits by way of dividends if that's how you want to do it. They might not like this because they all get paid the same regardless of what they do.

[Bluebird]

I would have thought that only owning 5% meant that I would only get 5% dividends, the other 95% going to the majority shareholder, who just by coincidence could be my wife

then you're into the realms of reasonable share distribution, I guess you could quite ligitimatley sell your shares to your wife...

But then that could take her over the 37k personal threshold - all too complicated for me to think about.

I'm sure there's an easy answer why you can't do this...

[oraclesmith]

S660a