Contract inside or outside the IR35

**Devlin** · 4 November 2007, 14:24

Originally posted by JohannM View Post

Hi all,

Will the agency tell you if the contract is inside or outside the IR35 or do you have to determine it yourself?

Thanks for you help and time

Johann

They may tell you it is outside IR35, but I wouldn't believe them! Get an independant check done with a specialist.

**JohannM** · 4 November 2007, 14:32

thanks Devlin

I did some reading an it seems that if you work under an umbrella company, its very difficult to get a contract outside the IR35, since you are actually a PAYE with them.

So I guess the question for me is should I go with an umbrella company or open up an LTD.

Thanks again

**TheFaQQer** · 4 November 2007, 15:03

Agents will tell you what they think you want to hear.

Most will tell you that the contract is outside IR35 - remember that it's both the contract and the working practices that determine inside or outside IR35, though.

Make your own mind up - I send my contracts to Qdos to get them checked out. Others use Bauer and Cottrell for theirs, some recommend Lawspeed, or SJD. There are a few out there that will check a contract for you - do a search here and you'll find what people say about them all.

**JohannM** · 4 November 2007, 15:09

Originally posted by TheFaQQer View Post

Agents will tell you what they think you want to hear.

Most will tell you that the contract is outside IR35 - remember that it's both the contract and the working practices that determine inside or outside IR35, though.

Make your own mind up - I send my contracts to Qdos to get them checked out. Others use Bauer and Cottrell for theirs, some recommend Lawspeed, or SJD. There are a few out there that will check a contract for you - do a search here and you'll find what people say about them all.

Thanks Faqqer.

I guess you have to have a LTD company though eh? Cause with Umbrella Company, effectively you are a PAYE employer with them, and there is no way to avoid the IR35, is that so?

**monkeyBoy32** · 5 November 2007, 08:51

But, do you guys even bother asking the agent whether the contract is inside or outside?

They must have a fair idea?

**TheFaQQer** · 5 November 2007, 08:54

I don't trust the agent on IR35 issues, so why ask?

If they tell me that it is, then I tell them that I have it checked out anyway. There is no point in them telling me that it's in or out, since most of them haven't got a clue anyway.

**fridge** · 6 November 2007, 21:36

Originally posted by TheFaQQer View Post

I don't trust the agent on IR35 issues, so why ask?

If they tell me that it is, then I tell them that I have it checked out anyway. There is no point in them telling me that it's in or out, since most of them haven't got a clue anyway.

Get B&C to check it out for you.

**Bluebird** · 7 November 2007, 11:51

Originally posted by JohannM View Post

thanks Devlin

I did some reading an it seems that if you work under an umbrella company, its very difficult to get a contract outside the IR35, since you are actually a PAYE with them.

So I guess the question for me is should I go with an umbrella company or open up an LTD.

Thanks again

If you go through an umbrella - IR35 doesn't apply.

**malvolio** · 7 November 2007, 12:08

Originally posted by Bluebird View Post

If you go through an umbrella - IR35 doesn't apply.

Not all of the answer though. It doesn't apply becuase you are paying full PAYE/NICs anyway so there's no point in looking at IR35. However if your contract is justificably outside IR35, you will be spending all that tax for no real reason. Even inside IR35, you get a marginally better return with your own company, since accountants fees are usually cheaper than Umbrellas, and you don't have all that pratting around with holiday pay retention and so on.

Contract inside or outside the IR35