New contract - new set-up

[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]

you're in the wrong forum mate. IMHO - go Ltd (there isn't much to it and you have control of your money, not some organisation who may feck off with it) and use either Darren upton or SJD accountants.

[malvolio]

And join the PCG (even if you don't, read their guide to freelancing). Shout99 is a news organisation these days.

[Ansel]

Thanks for the advice.
So would you declare yourself as being inside or outside of IR35?

[expat]

I've seen on some umbrella websites, that by joining them you're protected from IR35.

How can using an umbrella protect you from IR35? IR35 gets you taxed as an employee. Using an umbrella gets you taxed as an employee.

It's like shooting yourself in the head to protect yourself from accidental death.

[Paco]

And if you don't want to go the PCG route for IR35 protection, look at Caunce O'Hara's legal expenses insurance for if the Revenue come after you. Unless your contract is very obviously IR35 caught, if you have insurance to allow you to defend yourself properly then you shouldn't have a problem. IANAL

[malvolio]

Read the guides. Get a professional assessment of your contract. Then decide.

However, look at the reality of the situation (ignoring the contract pro tem) - can you send a sub to do the work (not do you, can you, without having to go through hoops), if there's no work do you still get paid, does anyone tell you what to do as opposed to saying what's needed and letting you get on with it. If the answers are yes, no, no, you are probably outside IR35.

The more pragmatic solution is to take out suficient insurance just in case and unless you are totally convinced you are caught, assume you aren't.

[Churchill]

How can using an umbrella protect you from IR35? IR35 gets you taxed as an employee. Using an umbrella gets you taxed as an employee.

It's like shooting yourself in the head to protect yourself from accidental death.

I've decided to become a sole trader!

If agencies don't like it they can get fecked!

[malvolio]

If you do, you won't get any work. Ever heard of S134c?

[Churchill]

If you do, you won't get any work. Ever heard of S134c?

Let me spell this out...

A client wants to buy a piece of software from me.

I produce the software.

The client pays me the agreed price.