Reply to: Does an IR35 contract 'red flag' my company?

[BrilloPad]

Of course when I started out I was. And I read stuff, came on here and said I've read X and Y and I am confused, then got torn apart.

I keep seeing others going through this and being torn apart as well, and I've seen them make a comment about NLUK calling him out for being horrible and in many situations deleting their accounts or never posting again.

Personally I think that is tulipty behaviour and very toxic to the community, so I called it out above. I'm sure in a 10 minute search I could find a bunch of similar posts about it.

Because of this bravado macho attitude (perpetuated by the whole forum, see threads about how everyone needs to be invoicing for thousands and driving porches etc.) the answer to so many questions is that you should know every single rule and piece of info otherwise you get called out as AYCOTBAC.

So it's quite simple to assume that if someone says hey I am taking the first steps to be a contractor, that they should either go crying back to permieland because they're not 'tough' enough, or they should go the opposite extreme and man up and go the whole way.

Not because it's the right thing to do, or the best decision, but that's what the macho bulltulip of this forum perpetuates in every facet. Most of the posts in general are always about this. While it's all good fun there, it does carry across. So I was presenting a view that says rather than just go big or go home, it is worth considering that getting into contracting is much easier if you can ease your way in.

My comments are torn apart and I'm branded as ignorant and weak or whatever because I don't submit to the whole oh yes you must go all in and make sure you have a huge BTL portfolio and AYCOTBAC without your 3 sports cars. I just see people that were like me, unable/unwilling to risk going contracting and flitting around for months burning through savings while finding their feet, and say don't submit to this macho philosophy, it's perfectly acceptable to take a few steps and ease yourself in as something to consider.

And I'll put up with the flak I get for that if it saves some newbie going through the torment I went through. I am really tired of seeing people join the forum, post a few times, get torn apart, then complain about how everyone (mostly NLUK) is being super mean to them when they're just trying to get started, then delete their account and leave forever.

But they're just NCOTBAC right?

Of course that behaviour seriously affects the supply of fresh meat to general.

[NibblyPig]

Of course when I started out I was. And I read stuff, came on here and said I've read X and Y and I am confused, then got torn apart.

I keep seeing others going through this and being torn apart as well, and I've seen them make a comment about NLUK calling him out for being horrible and in many situations deleting their accounts or never posting again.

Personally I think that is tulipty behaviour and very toxic to the community, so I called it out above. I'm sure in a 10 minute search I could find a bunch of similar posts about it.

Because of this bravado macho attitude (perpetuated by the whole forum, see threads about how everyone needs to be invoicing for thousands and driving porches etc.) the answer to so many questions is that you should know every single rule and piece of info otherwise you get called out as AYCOTBAC.

So it's quite simple to assume that if someone says hey I am taking the first steps to be a contractor, that they should either go crying back to permieland because they're not 'tough' enough, or they should go the opposite extreme and man up and go the whole way.

Not because it's the right thing to do, or the best decision, but that's what the macho bulltulip of this forum perpetuates in every facet. Most of the posts in general are always about this. While it's all good fun there, it does carry across. So I was presenting a view that says rather than just go big or go home, it is worth considering that getting into contracting is much easier if you can ease your way in.

My comments are torn apart and I'm branded as ignorant and weak or whatever because I don't submit to the whole oh yes you must go all in and make sure you have a huge BTL portfolio and AYCOTBAC without your 3 sports cars. I just see people that were like me, unable/unwilling to risk going contracting and flitting around for months burning through savings while finding their feet, and say don't submit to this macho philosophy, it's perfectly acceptable to take a few steps and ease yourself in as something to consider.

And I'll put up with the flak I get for that if it saves some newbie going through the torment I went through. I am really tired of seeing people join the forum, post a few times, get torn apart, then complain about how everyone (mostly NLUK) is being super mean to them when they're just trying to get started, then delete their account and leave forever.

But they're just NCOTBAC right?

[SueEllen]

Presumably you reply with 'yeah no problem' rather than 'whats a vat certificate let me write all that down I will have to ask my accountant because I don't know'. If you reply with the latter because you're not ready, then your CV is gonna end up in the bin.

Firstly I had read this website and searched the forum a while before I decided to go contracting. In addition I had asked Lisa* from Contractor Umbrella plus the contractors I know a few silly questions in private.

I then had signed up with a contractor accountant and my VAT was being processed. I also know other accountants who deal with small businesses, so with that and the information from the contractors I know, I had a clue what I needed to do.

When it came to banks I made a list of banks I wanted to join with business banking then I just wandered around my local high street. One of them on my list agreed they could open me a bank account there and then.

Yeah, and are being torn to pieces like I was when I first did the same thing! I'm only saying it's a huge help to have a free contracting job than jumping in the deep end with no income or experience because I have been in that situation recently and I know exactly what it is like.

No need to be rude to me calling me ignorant as well as poor newbie contractor. The worst part of my contracting experience was trying to find things out on here while people treat you like tulip.

You have just admitted you were ignorant.

You are also soft-skinned which agents can sense.

The OP, Matty, is clearly neither.

In addition you clearly didn't (or don't) know how to use internet forums. You don't start asking random questions without reading posts, without using the search, and without clicking on links and reading them.

*May not have been Lisa but it was someone helpful from that country.

[NibblyPig]

This part is complete nonsense.

I get asked verbally do I have all these. Then only once I've secured the contract do they ask me for copies of the paper work.

Presumably you reply with 'yeah no problem' rather than 'whats a vat certificate let me write all that down I will have to ask my accountant because I don't know'. If you reply with the latter because you're not ready, then your CV is gonna end up in the bin.

This where the OP is showing you they aren't as ignorant as you in the same situation the fact they are on this forum and doing their research.

Yeah, and are being torn to pieces like I was when I first did the same thing! I'm only saying it's a huge help to have a free contracting job than jumping in the deep end with no income or experience because I have been in that situation recently and I know exactly what it is like.

No need to be rude to me calling me ignorant as well as poor newbie contractor. The worst part of my contracting experience was trying to find things out on here while people treat you like tulip.

[northernladuk]

Again a whole raft of stuff I could correct in there but CBA.

[SueEllen]

Indeed. If you can't talk confidently about them then your CV might hit the bin if they think you are trying it on. Do you think OP will be able to quickly reply when an agent says 'ok I'll put you forward please send me your VAT certificate, company incorporation certificate, bank acc sort code IBAN and liability insurance they're interviewing later today' or will he be going hold on how do I get my bank details I am just setting my bank up, what's a VAT certificate, did I get that when I signed up etc. etc.

This part is complete nonsense.

I get asked verbally do I have all these. Then only once I've secured the contract do they ask me for copies of the paper work.

I only found out how to get half of that stuff at the start of my first gig, and I had ages to figure it out because I already had the job

NLUK says you can set all that up in a couple of days, but again he always assumes everyone knows all about contracting and has done it before. It took me 3 weeks to get a business bank account sorted due to some teething problems (was eventually compensated for them), I had to sort out my accountant, purchase required accounting software, discuss how to proceed, research contracting, set up an LTD, research best insurance, buy a car, etc. etc.

This where the OP is showing you they aren't as ignorant as you in the same situation the fact they are on this forum and doing their research.

[NibblyPig]

What had the way I speak on the forum got to do with the way I run my business and how is advise others?

When I joined the forum a couple of years prior to successfully starting contracting, I was trying to get advice, and everything I asked and posted you were extremely hostile, which really put me off and made me think I was not remotely ready. As a result of that and my struggling to get going from recruiters hanging up on me etc. I decided to give up and back to perm for a couple of years. After I got the courage to try again it turned out great and wasn't anywhere near as daunting as I was led to believe.

I see people in my position come on here and get blasted and told they have no chance because they don't know every single thing about IR35, and they probably feel the same as I felt, so I do feel somewhat protective of them. And most of what I struggled with was getting the first contract, which was offered free after I left my permie job and incredibly useful to get my foot in the door.

When I tried going straight into contracting the first time it didn't work, and it was only bankrolled by the fact I was being made redundant from a permie job in several months and they agreed to waive my notice period, so I set up an LTD and was ready to go.

So when you post good advice which is a lot of the time I will agree but when you tell people they are idiots and need to learn stuff that most people only learn after months of being exposed to contracting, then I jump in and get defensive

[TheFaQQer]

However, I've been talking to a few people already contracting and they seem to believe I could be risking automatically 'red flagging' my company in some way to taxman. eg: even if I then move on to perfectly legitimate outside-35 contracts I run the risk of being under more scrutiny because of that first one.

Is this a reasonable bit of advice, or a load of rubbish?

Sounds like rubbish to me - I have a role inside IR35 (thanks to the Alexander review), and a contract outside at the same time. But I doubt that there is anything that red flags the entire company as something to watch.

Where is does make a difference is that HMRC may have a tendency to include your entire revenue (rather than just the IR35-caught revenue) in the figures that they use to calculate how much is being "lost" by people not declaring themselves inside IR35 - a fact that has been pointed out to them in past.

[Fred Bloggs]

I'm in the middle ground on this one. While a BOS/BAU role is offered at a former employer, there can really be little doubt it is IR35 caught and should really be avoided. But in some cases, work at a previous employer can work. When I first left permiedom, my ex employer engaged me for a series of one off days to support one of their systems. The work was carried out against a series of purchase orders on standard commercial terms and conditions. No supervision, direction, control etc involved. It worked for me and it worked for them. I don't believe what I did was in any way IR35 caught. So, I think working at a previous employer can work, but only given certain circumstances.

[northernladuk]

That's what someone who is derisive and abrupt to all new contractors would do, like yourself

What had the way I speak on the forum got to do with the way I run my business and how is advise others?

There is so much that needs correcting in that lot I can't even be bothered to start...

Your opinion is it's good to play contractors at your ex employer. Mine is that it isn't. Let's leave it at that.

[NibblyPig]

So leave and get a lot more lucrative one that's outside. That's what someone that is serious would do. Not stay and hang on to mummy's apron tails.


Thats what someone serious would do.. You getting me yet?

That's what someone who is derisive and abrupt to all new contractors would do, like yourself

You always forget that it's not easy to start out and assume everyone knows everything there is to know already.

@Nibblypig I get asked if I have my own limited company and I've been contracting for years.

I also randomly get asked about different insurances, bank account and occasionally, where credit checks are required, about my accountant.

Agents just ask you that so if you are selected you can start asap.

Indeed. If you can't talk confidently about them then your CV might hit the bin if they think you are trying it on. Do you think OP will be able to quickly reply when an agent says 'ok I'll put you forward please send me your VAT certificate, company incorporation certificate, bank acc sort code IBAN and liability insurance they're interviewing later today' or will he be going hold on how do I get my bank details I am just setting my bank up, what's a VAT certificate, did I get that when I signed up etc. etc.

I only found out how to get half of that stuff at the start of my first gig, and I had ages to figure it out because I already had the job

NLUK says you can set all that up in a couple of days, but again he always assumes everyone knows all about contracting and has done it before. It took me 3 weeks to get a business bank account sorted due to some teething problems (was eventually compensated for them), I had to sort out my accountant, purchase required accounting software, discuss how to proceed, research contracting, set up an LTD, research best insurance, buy a car, etc. etc.

Half of it I figured out on-the-job as a contractor for my former employer. I felt ready and confident at the end of it, and landed a gig a week later.

It is in your best interests to do whatever you can to succeed, if you think you go from 0 to fully fledged contractor instantly then you're probably deluding yourself and you're likely going to burn through whatever savings you have figuring it all out. It's no a brainer to take a free transition step that helps you get everything figured out and it will help you with talking to agents.

[VectraMan]

Sounds like a load of rubbish to me.

They are speculating. So let me speculate the other way. If you operate a contract inside IR35, then that shows the tax man that you take IR35 seriously, you understand it and obey the law. Therefore, if you say that your next contract is outside IR35, they are less likely to investigate it and more likely to take your word because you've built up credibility. /speculation

WHS. If anything a company that's only ever paid its one director exactly the right minimum salary and has always paid out nearly all its post-tax profits as dividends is a red flag. In reality nobody is ever likely to look at what your company does closely enough for any of this to be a factor.

It is a fairly simple and safe way to get started and means you'll be properly set up for contract number 2. If there's any truth in agents not seeing you as an experienced contractor then you'll be no worse off than you are now.

But if you're confident you can get something better straight away, then do that.

[WordIsBond]

However, I've been talking to a few people already contracting and they seem to believe I could be risking automatically 'red flagging' my company in some way to taxman. eg: even if I then move on to perfectly legitimate outside-35 contracts I run the risk of being under more scrutiny because of that first one.

Is this a reasonable bit of advice, or a load of rubbish?

Sounds like a load of rubbish to me.

They are speculating. So let me speculate the other way. If you operate a contract inside IR35, then that shows the tax man that you take IR35 seriously, you understand it and obey the law. Therefore, if you say that your next contract is outside IR35, they are less likely to investigate it and more likely to take your word because you've built up credibility. /speculation

I defy anyone to prove my speculation is worse than the other guys you've been talking to.

Besides, we don't even know what IR35 is going to look like next month. It could all change in the next two days. What we do know is that under the current regime, very few investigations take place, and there are contractors who are still at their former perm employers and have been for a long time and have never been investigated.

I think it is extremely unlikely that they would red flag someone who voluntarily operates IR35 on a contract when they know there are probably thousands taking the mick. I'd say if the contract makes sense with what you want to do with your business, take it.

[SueEllen]

@Nibblypig I get asked if I have my own limited company and I've been contracting for years.

I also randomly get asked about different insurances, bank account and occasionally, where credit checks are required, about my accountant.

Agents just ask you that so if you are selected you can start asap.

[northernladuk]

There's a bit of a difference, the agent is looking for someone that is actually serious, rather than someone who has nothing set up and no idea what they're doing and is looking for contracts that will work with their 6 week notice period.

Right and someone serious is just altering their pay structure at their perm employer... I don't think so. Going it easy at your previous employer would indicate otherwise if anything.

One or two agents asked me about contracting at the same place that I worked at. I said I left to go contracting and they needed me to come back, so I did for a 3 months or so, as a contractor. I worked within IR35 and dutifully paid the required tax and NI. They were happy when I said I had an LTD, accountant, all my insurances, flat rate registration, could start immediately etc. because they instantly knew I was serious and the rest is history.

Again... Nothing in that story indicates serious. All the stuff you mention can be set up in a few days. The fact they questioned it indicates it's not a good thing.

I don't see the harm, and it's a free gig that sets you up to go. There certainly shouldn't be any IR35 related issues provided you review your future contracts and purchase any necessary insurances. And work that one within IR35 of course.

So leave and get a lot more lucrative one that's outside. That's what someone that is serious would do. Not stay and hang on to mummy's apron tails.

If you're loaded and are happy to jump into the deep end then fair enough, hopefully the market for OP's skills is good enough that agents won't bin CVs for trivial reasons.

Thats what someone serious would do.. You getting me yet?