Will be inside IR35?

[newbcntr]

Hi,

I am currently working as a fixed term contractor for a company. I started on a 6 month FTC which was extended by another 2.5 months and expires in March. Since the company is relunctant to either offer a permanent position or extend for longer terms, they offered to let me contract via a limited company at a daily rate instead.

a) I was wondering if change my current contract from fixed term contract to contract through a limited company (as it would make more financial sense for me) will I fall within IT35? Is that still dependant on the contract wordings and terms?

b)Would using an umbrella company be a better option?

c) Also, if I manage to find another contract position in a different company, will that come under IR35 as well?

Thanks in advance for your advice.

N

[Wanderer]

a) I was wondering if change my current contract from fixed term contract to contract through a limited company (as it would make more financial sense for me) will I fall within IT35? Is that still dependant on the contract wordings and terms?

Yes, but crucially, it depends on the actual working practices too. Your best bet is to get your contract reviewed (do a google search for site:contractoruk.com ir35 contract review) and you will find the names of a few companies that do contract reviews.

They can look over your contract and see if it's offering you work as a business or as an employee. There may be a few small changes to your contract and working practices that you can make to put yourself outside IR35 or it may be that you are well caught and you should probably go with an umbrella because they are a lot less hassle if you are IR35 caught anyway.

If you go the LTD company route then get yourself an accountant first. There are a few that post useful stuff on this forum or you can join the PCG who can kick start you with everything you need including insurance, accountancy IR35 reviews etc.

c) Also, if I manage to find another contract position in a different company, will that come under IR35 as well?

Not automatically, remember that each contract is judged as an individual case. Even if you work two jobs at the same time one could potentially be caught and the other not.

You shouldn't just bumble your way through this because it is very likely that a wrong decision will end up costing you thousands. Have a read about IR35 and the First Timers Guide. We probably can't tell you if you are IR35 caught, invest a couple of hundred in a proper contract review. They will tell you what you need to negotiate and how you need to structure your business relationship with the client so that you don't get caught.

Good luck!

[northernladuk]

Bearing in mind you have made no attempt to understand IR35 and place yourself outside, act like a business and let yourself be pushed around and do as they wish then you are absolutely inside IR35 and should be taxed as a hidden permie.

Everything Wanderer says is absolutely spot on but you are making yourself a hidden permie whatever advice he gives.

HTH.

[NotAllThere]

To be outside IR35 you will need to change your working practices and your client will need to agree to that.

[LisaContractorUmbrella]

What the guys say - you need to fully understand IR35; both the way that it works and the implications of being either inside or outside. You also need to be aware that you can have whatever you like written in a contract but if it doesn't reflect your working practises it's not really worth the paper it's written on.

[TheFaQQer]

b)Would using an umbrella company be a better option?

Well, it would certainly clarify your IR35 status.

[northernladuk]

Well, it would certainly clarify your IR35 status.

Nice post.