From Outside IR35 to umbrella

[ftccp2020]

Hello all,
I am sorry, if this has already been answered before.
At the moment I am finishing my contract which is Outside IR35.
The client then offered to all of the contractors in the same team extension of the contract but under umbrella rules.

How HMRC wise risky this move is?
The same team, same job, extension of the contract, but now under umbrella?

Thank you.

[cojak]

Hi,

Have a read of this: https://www.contractoruk.com/forums/...ould-i-go.html

[Paralytic]

I am sorry, if this has already been answered before.

No you're not - you didn't even try to search, did you

[ftccp2020]

Thank you. I did try to search actually, but did not find the post that cojac shared just now

As a result, I decided to ask, hoping that somebody will point me in the right direction.

Thank you for the advice.

[Wary]

I recently changed from outside-IR35 to brolly at renewal, something that I was OK about as I believe my role has significantly changed from when I first commenced - hence my status is now more questionable. This was partly in the hope that it would negate the need for the end-client to make a determination.

Appreciate that my action could be deemed as self-determination of inside-IR35, although I thought that would be better than a client-determination especially as I could argue that it was simply a change of operating method. But my agency is insistent that they need to obtain a formal determination from the client, in accordance with the amended legislation, despite the fact that I don’t operate through a PSC.

Is that correct? I thought the reason why some companies have banned PSCs is to avoid having to make IR35-determinations, and because they’re not allowed to make a blanket decision then they’re effectively coming up with a way of making a blanket no-decision? That suggests that the agency aren't compelled to get an end-client determination for non-PSC contractors.

Appreciate that I'm putting myself at risk either way. I'm just trying to minimise the risk whilst staying with the same client as I'd likely struggle to find work elsewhere anytime soon.

[Anubis]

For those who work under an umbrella company, IR35 status is not a factor that needs to be considered. Compliant umbrella companies effectively become the employer for contractors and operate Pay as You Earn (PAYE) income tax and National Insurance contributions.

You are no longer a limited company. You are an individual being paid by another company (the umbrella)

[GhostofTarbera]

Why not phone HMRC and turn yourself in as allways within IR35 at this client

Not sure you could have played this much worse to be fair


Sent from my iPhone using Contractor UK Forum

[Anubis]

Also agree with the person above.

By continuing as before but now declaring yourself as an employee basically negates any argument you did have as being a service provider before.

[Kanaiya]

For those who work under an umbrella company, IR35 status is not a factor that needs to be considered. Compliant umbrella companies effectively become the employer for contractors and operate Pay as You Earn (PAYE) income tax and National Insurance contributions.

You are no longer a limited company. You are an individual being paid by another company (the umbrella)

True , under an umbrella company, IR35 status is not a factor that needs to be considered. But I am sure HMRC tax system is smart enough to trigger whats changed and to trigger the backdated tax.

[Anubis]

True , under an umbrella company, IR35 status is not a factor that needs to be considered. But I am sure HMRC tax system is smart enough to trigger whats changed and to trigger the backdated tax.

Yep agreed. Which is why you really shouldn't ever go from outside to something else at the same client (unless you continue outside). Doing so increases HMRC of asking for back taxes at the same client when you declared yourself as outside.