New to contracting need payment advice please?

[Spamfritter]

Hi All

I am completely green to this so hope that somebody could point out what is likely to be the obvious!

I have usually worked directly on a PAYE employed status, but I do have my own UTR and submit SAs due to having some rental property. My partner is self-employed and also has a UTR and all of his income is invoiced directly to his several clients. He employs sub-contractors himself and could invoice for me and pay me himself in the same way as he does his sub-contractors if that is allowed??

My new contract with an agency is on a contractor basis, the client is public sector.

They have issued my assignment stating that the role is outside of IR35- but have informed me that I will need to use an umbrella company for payment?

When I've looked into what an umbrella company does, the deductions seem extortionate, I believe I would PAYE, employees NI at 12.5% then employers NI at 13% then apprenticeship levy and then their fee for processing. It will total almost half of my pay and I will be much worse off than my last role which was directly employed and I will also get no annual leave pay etc.

Could anyone confirm whether I need to use an umbrella company and if not, am I best just to submit invoices directly to the agency or client?

I would appreciate some steering in the right direction if anyone can help please?

[cojak]

If it’s public sector and they are insisting on you using an umbrella then it’s highly likely that the contract is inside IR35 and the agent is relying on your newbie status to accept the contract.

Do you know what makes a contract inside or outside IR35?

Are you covering maternity leave (in an interim capacity for example) or are you on a project where you will leave the organisation once the project is completed?

You need to know the difference because this could be an expensive mistake to make.

[ladymuck]

Is the thread moving feature fixed? Probably best to put this in the right forum before the hounds get at it

[cojak]

Is the thread moving feature fixed? Probably best to put this in the right forum before the hounds get at it

Sadly not.

[DoctorStrangelove]

Is the thread moving feature fixed? Probably best to put this in the right forum before the hounds get at it

Wot? Specifically In General, like?

Woof! Woof!

[SueEllen]

A new user with the name "Spamfritter" mmm......

[northernladuk]

Whatever the answer is you will still not be able to go via hubbys LTD in most cases. Agencies insist on the contractor being major shareholder of the LTD and you won't be so unlikely they will let you use it. Setting up LTD's is simple enough to not have to mess about with going on his anyway.

They have issued my assignment stating that the role is outside of IR35- but have informed me that I will need to use an umbrella company for payment?

You need to ask them why and get them to detail the situation. This isn't normal but when it comes to public sector who knows what's going on. It could be they've a Personal Service Company ban so the status of the contract is largely irrelevant. The only engagement is via brolly. Nail the agent down for a clear explanation of the situation.

[northernladuk]

And be a bit more careful when posting questions. You have three areas to post in which are clearly explained in the titles.

General
All hope abandon ye who enter here. Seriously.

Business / Contracts
For IT contractor companies to discuss business and contract opportunities.

Accounting / Legal
Financial and legal issues affecting IT contractor companies, including IR35.

I completely fail to understand why anyone thinks out of those three the one that says 'All hope abandon ye who enters here. Seriously.' is the one to chose. Being a newbie isn't much of an excuse. A two second scan of each area and it's content should make it abundantly clear.