New Contract

[Ansel]

Hey People

Sorry to trouble you all, I've been giving myself a headache for a good week now. Through doing all this reading on this site, it's cleared some matters but raised others!

To get to the point, I've a contract starting on 30th January. I'm struggling to decide between setting up a limited company or being paid through an umbrella. My agent has told me that the contract is IR35-friendly.

I've seen on some umbrella websites, that by joining them you're protected from IR35. Would you say you think this true? I'm very dubious about all this IR35 business, and would think that the IR would come chasing me not the umbrella.

I don't mind the work involved in the running of a limited company, as I'd rather do the administration myself than pay an umbrella compnay to do the job for me. The only thing I am really worried about is in the event that the IR investigates and decides I fall inside IR35. Although they've said it's an IR35-friendly contract, I believe (from talking to the client) that it does seem to follow a more 'disguise employee' pattern. I'd take out membership with either PCG or Shout99 to protect myself, but would you declare yourself being outside IR35, even though you really believed you weren't?

Thanks for any help

Ansel

[Bagpuss]

Best advice is to talk to Darren Upton or SJD accounting. They can lay your mind at rest.

[Ansel]

Thanks Puss

[freshblue]

Brolly

Some umbrella companies use a composite model to pay you and thus you need to be IR35 friendly, many advertise an 80% return through divdend payments etc. Technically these could be seen by the HMCR as more "scheme" based and yes the individual could be investigated. Other umbrellas operate a PAYE version and this taxes you at source and with expenses should get you 70-75% return (averages). These are less risky of course but lower return.