New to contracting, what would you do ?

**DevUK** · 18 February 2020, 13:25

Originally posted by AlanPs1 View Post

Hi all.

This is my first post and I can see there is generally a lot of information around IR35 on the forums and I have had a good look through. It has been very helpful.

My situation is that I am PAYE at present. As part of the strategy I am working to, becoming a contractor early 2020 is the plan, but of course the IR35 changes have got me thinking.

I do not have a limited company (but could set one up) as of yet and I have been made my first contract offer for 6 months, Inside the IR35 and the recruiter is promoting using umbrella.

Should I be going down that route as I am first timer or should I still be setting up an Ltd company as I would have in 2018 2019 per say?

I would love to hear the thoughts of those who are more experienced in this field that I am.

Thanks in advance, Alan

Good luck with it mate.

It doesn't, to me, sound like you need a ltd company - so I'm not sure why you would yet create one. If you plan to trade from a ltd company too and engage as a 'real' business then you obviously need one. If you're just looking to work inside gigs, you don't. The recruiter's recommended advice of umbrella is absolutely the right one, all things considered.

**AlanPs1** · 18 February 2020, 13:31

Originally posted by DevUK View Post

Good luck with it mate.

It doesn't, to me, sound like you need a ltd company - so I'm not sure why you would yet create one. If you plan to trade from a ltd company too and engage as a 'real' business then you obviously need one. If you're just looking to work inside gigs, you don't. The recruiter's recommended advice of umbrella is absolutely the right one, all things considered.

Thank you for your input. I guess I am also trying to get my head round what established contractors will be doing this year too. Will they go umbrella when asked to work inside IR35 or what do they do?

What I have been offered is inside IR35, it's more than double pay compared to what I get PAYE, even with Umbrella and it's exactly the type of projects I want to be part of. So I think I try it out before re-evaluating after 6 months.

**GhostofTarbera** · 18 February 2020, 13:33

New to contracting, what would you do ?

Originally posted by AlanPs1 View Post

Thank you for your input. I guess I am also trying to get my head round what established contractors will be doing this year too. Will they go umbrella when asked to work inside IR35 or what do they do?

What I have been offered is inside IR35, it's more than double pay compared to what I get PAYE, even with Umbrella and it's exactly the type of projects I want to be part of. So I think I try it out before re-evaluating after 6 months.

Established contractors will not have a choice if inside IR35 by agent/client as forced to go umbrella

The other option is to turn down the contract

Sent from my iPhone using Contractor UK Forum

**DevUK** · 18 February 2020, 13:38

Originally posted by AlanPs1 View Post

Thank you for your input. I guess I am also trying to get my head round what established contractors will be doing this year too. Will they go umbrella when asked to work inside IR35 or what do they do?

What I have been offered is inside IR35, it's more than double pay compared to what I get PAYE, even with Umbrella and it's exactly the type of projects I want to be part of. So I think I try it out before re-evaluating after 6 months.

This forum is full of answers to all of that. So I don't mean to be funny but have a good search around. Few good threads around the state of the market and what other contractors are doing in response.

If you're going straight to inside your situation's not really subject to the same concern as many others' here. In terms of the (suggested) risk of continuing on a contract that was previously determined outside to now, all of a sudden, be determined inside (by the client). You're just going straight inside, so you don't have that risk. What you will find is relevant to your situation in this forum is the current state of the market and what comes after your 6 month gig. People are struggling to land the kind of contract that, in my experience/sector at least, was in abundance 8 months ago. There's a lot of hype both on here and linkedin etc. around the "contractor exodus" and how it's ended contracting. I think all that's a bit heavy, but there is undoubtedly a hit to the market. The demand is there, the market isn't - something will give.

You should make up your own mind on the direction in which you see the market going and whether that works for you. Personally, I have mouths to feed, and I have lost faith in the 'outside' market sorting itself out before my war chest empties. So I've gone perm on a decent salary and placing my bets nice and early. I've gone through tough/quiet times as you do, naturally, as a business owner - but I think this time it's a bit different.

A seasoned contractor even slightly clued up on ir35 will be daft to switch inside without a new contract. Despite HMRC's assurances, that would be madness.

**AlanPs1** · 18 February 2020, 13:55

Originally posted by GhostofTarbera View Post

Established contractors will not have a choice if inside IR35 by agent/client as forced to go umbrella

The other option is to turn down the contract

Sent from my iPhone using Contractor UK Forum

Thanks, this is what I needed to know really!

**northernladuk** · 18 February 2020, 14:01

Originally posted by AlanPs1 View Post

Thanks, this is what I needed to know really!

It's not really.

You need to know everything else discussed and much much more.

**AlanPs1** · 18 February 2020, 14:25

Originally posted by northernladuk View Post

It's not really.

You need to know everything else discussed and much much more.

For your benefit, I will change my reply to "Thanks, this is what I needed to 'get my head round' !"

In addition to what I already know, I will make sure I know everything else discussed here and much more. I just wanted to get my head round that aspect of things really as I couldn't quite get a direct answer from those I had been speaking to but they're all old hats.

Thanks

**WordIsBond** · 18 February 2020, 16:57

Originally posted by AlanPs1 View Post

In addition to what I already know, I will make sure I know everything else discussed here and much more.

Sounds like a formula to turn one insane.

In brief, there's no absolutely no reason to form a Ltd if you are going to be inside. There might be reasons for someone who already has a Ltd to keep it, at least for a while, if they are going to be inside IR35, but no reason for someone just starting out to form one.

Go brolly, get into contracting, if the world starts to change and more outside contracts start to come up, you might want your own company then. For now, get into the contracting lifestyle and see if you actually like it and want to keep doing it, without all the hassles of a Ltd Co that would be of no real benefit, and actually cost you something. Just go brolly.

**fidot** · 20 February 2020, 08:19

As per the rest of the replies, umbrella seems the best approach if you are determined to give contracting a try.

However, I wouldn't necessarily go with the umbrella recommended by the agency. I recommend doing your own research.

Eg if pension contributions are important to you, find an umbrella that supports salary sacrifice.

New to contracting, what would you do ?