Umbrella companies and IR35

[toast]

Afternoon CUK - I would like to pick the brains of all you knowledgable chaps and chapesses for a moment if I may.

I've been using an umbrella company for a while, and they have recently told me that due to changes in legislation, from now on their structure and the way they handle payments will have to change.

This means that rather than passing all money to me at once, they have to split it all into minimum wage, then an extra payment, minus money for sick/holiday pay etc.

I'm not into all that, so this will be the final push I need to finally start a limited co.

I would greatly appreciate answers/comments on the following:

1. Assuming I treat my contract as within IR35, will I make slightly more money than using the umbrella company, due to the 5% allowance and registering for VAT?

2. What's the latest with IR35? Is it worth worrying about? I keep hearing that the chances of being investigated are so slim, that it's a risk worth taking.

Thanks in advance!

[Diestl]

2. What's the latest with IR35? Is it worth worrying about? I keep hearing that the chances of being investigated are so slim, that it's a risk worth taking.

Thanks in advance!

If you have short term contracts (3 months) and join the PCG then you should be ok, if Hector investigates it will be for one contract only, so not a tremendous amount to pay back.

[VectraMan]

1. Assuming I treat my contract as within IR35, will I make slightly more money than using the umbrella company, due to the 5% allowance and registering for VAT?

Yes you should, but I would personally say it's not worth the hassle and go for the ease of an umbrella if you really are caught by IR35.