Contract with HMRC, inside IR35 - anyone know how it will work please?

[Glencky]

Thanks on the last few responses but they have basically confirmed my thinking - much appreciated, all (esp considering I posted in the wrong place to start with!)

By the way - I'm a she, rather than a he! Some of us PMs are, you know! ;-)

[psychocandy]

Someone recently said only the dumb and desperate work inside IR35 ...
You'll probably be forced to work through an umbrella or if you don't you'll find yourself no better off and you'll have to wait longer to be paid. You will lose control of what you earn. You'll also be shocked at how little take home pay you'll be left with. Your probably better off being employed than working inside, basically it's a **** sandwich.

Complete bulltulip.

Agreed umbrella is probably the best option.

Wait longer? Bulltulip. Why? I've worked through this agency twice now. Once via ltd and once via umbrella. Pay both every week.

Less take home? Obviously, more tax and NI but depends on rate doesnt it? A lot of PS have hiked the rates by 35% to cover this. I did when I started. Went from an outside gig to an inside IR35 PS but with a 35% rate increase. Take home roughly the same.

Judge an inside gig on its merits and bottom line take home. Yes its a minor hassle setting up umbrella etc but you're IR35 safe aren't you? Expenses - yes you can't claim but does it matter if its local - see above statement about bottom line.

To say the an inside gig is only for the dumb and desperate just shows how naive you are to be honest.

[psychocandy]

If he wants to make pension contributions then that isn't going to be possible.

For public sector inside IR35 work I'd find a decent umbrella and just be their employee for a while - let them handle it all and keep it well away from the limited company - keep that for non-public sector or work that is outside IR35.

Agree. By far easiest way for inside IR35 PS is umbrella.

[TonyF]

Having researched briefly (more planned later today) on the other forum I should have started out on in the first place, however, I can't see that it seems likely I'll get any public sector hirers to contract with my limited company, and if they're paying me net I don't see any benefit anyway? It seems like umbrella company with the facility for pension contributions via salary sacrifice is the least bad option - or am I missing something?

You aren't

Something that irks me is I appear to be losing the 5% deduction in the IR35 deemed employment calculation doing things this way, but it's a bit of a rounding issue really and not that significant...

HRMC argue that the 5% isn't needed any more because they are removing the uncertainty of IR35 this way and so you don't need insurance or to have a contract check. This is, of course, untrue (the 5% is intended to cover all your expenses).

[TonyF]

You can continue to work via your limited company on the contract inside IR35, the difference will be that you will receive income already taxed, your accountant if experienced with IR35 should help you understand how it all works.

If he wants to make pension contributions then that isn't going to be possible.

For public sector inside IR35 work I'd find a decent umbrella and just be their employee for a while - let them handle it all and keep it well away from the limited company - keep that for non-public sector or work that is outside IR35.

[Glencky]

You can continue to work via your limited company on the contract inside IR35, the difference will be that you will receive income already taxed, your accountant if experienced with IR35 should help you understand how it all works.

Thanks for this. Unfortunately I've not had much luck with accountants. I started out with SJD, who I later ditched after multiple errors on their part which mostly came down to them not getting IR35 and operating within it (I 'caught' several mess-ups on their part just in time after investigating myself when something felt 'not quite right'). My current accountant, a small practitioner recommended by a friend with very high standards (!) has been overall much better, and also cheaper, but unfortunately after some staff shortages in the last year has now made two of exactly the same mistakes.

So one of the things I've been thinking is that I'd wind up my last year's accounts and let the accountant go for the period if I'm inside IR35 and being paid net.

Having researched briefly (more planned later today) on the other forum I should have started out on in the first place, however, I can't see that it seems likely I'll get any public sector hirers to contract with my limited company, and if they're paying me net I don't see any benefit anyway? It seems like umbrella company with the facility for pension contributions via salary sacrifice is the least bad option - or am I missing something?

Something that irks me is I appear to be losing the 5% deduction in the IR35 deemed employment calculation doing things this way, but it's a bit of a rounding issue really and not that significant...

[Chart Accountancy]

How could I possibly be shocked at how little take-home pay I'll be left with? I've already worked it out, it's not exactly complicated maths, is it? I'm very comfortable with my business decisions, thanks - and with the rates I command which make the whole thing more than worthwhile.

WORDISBOND - sadly not! :-D

You can continue to work via your limited company on the contract inside IR35, the difference will be that you will receive income already taxed, your accountant if experienced with IR35 should help you understand how it all works.

[fullyautomatix]

Someone recently said only the dumb and desperate work inside IR35 ...
You'll probably be forced to work through an umbrella or if you don't you'll find yourself no better off and you'll have to wait longer to be paid. You will lose control of what you earn. You'll also be shocked at how little take home pay you'll be left with. Your probably better off being employed than working inside, basically it's a **** sandwich.

WTF? Someone who chose a dodgy loan scheme and paid no tax and is now being bankrupted by HMRC is probably not qualified enough to call others dumb when they choose to work inside IR35. At least they will have a good night's sleep everyday.

[Glencky]

Someone recently said only the dumb and desperate work inside IR35 ...
You'll probably be forced to work through an umbrella or if you don't you'll find yourself no better off and you'll have to wait longer to be paid. You will lose control of what you earn. You'll also be shocked at how little take home pay you'll be left with. Your probably better off being employed than working inside, basically it's a **** sandwich.

How could I possibly be shocked at how little take-home pay I'll be left with? I've already worked it out, it's not exactly complicated maths, is it? I'm very comfortable with my business decisions, thanks - and with the rates I command which make the whole thing more than worthwhile.

WORDISBOND - sadly not! :-D

[northernladuk]

Someone recently said only the dumb and desperate work inside IR35 ...
You'll probably be forced to work through an umbrella or if you don't you'll find yourself no better off and you'll have to wait longer to be paid. You will lose control of what you earn. You'll also be shocked at how little take home pay you'll be left with. Your probably better off being employed than working inside, basically it's a **** sandwich.

And you are so good at choosing a financial model to use?

[Vincenth1]

IR35

Someone recently said only the dumb and desperate work inside IR35 ...
You'll probably be forced to work through an umbrella or if you don't you'll find yourself no better off and you'll have to wait longer to be paid. You will lose control of what you earn. You'll also be shocked at how little take home pay you'll be left with. Your probably better off being employed than working inside, basically it's a **** sandwich.

[WordIsBond]

It's a wonder I manage to get out of bed, isn't it...

Extremely well qualified for a stint at HMRC, sounds like to me.

This isn't a project to fix CEST, is it, by any chance?

[Glencky]

Hahaha! Ouch, I'd best go off and look there, then..! It's a wonder I manage to get out of bed, isn't it...

[northernladuk]

And your searching didn't reveal the existence of a sub forum in this very area section called 'Public Sector IR35' where all this is explained/discussed ad infinitum?

[Glencky]

Hi all - I've found it hard to find the answer to this even though I suspect it's on here somewhere, as I just get too many hits. So - sorry if this has been asked before, I did try and search!

I've got an agent (who I know and think is good) chasing me to apply for a role working at HMRC (I'm a PM). I've been looking for a contract for a few weeks and hence am open to the idea - I usually work in FS and it'd be interesting to work 'on the other side' for a while, and to get public sector on my CV. I've been contracting via MyCo Ltd for over 4 years and I have chosen to operate all my (private sector) contracts so far inside IR35 (on a 'working practices' basis).

What this means is that unlike many others, the fact that the HMRC contract is billed as inside IR35 doesn't put me off because it's not a financial loss for me on a comparable rate when compared with what I've been doing so far. What I'm interested in though is how it would work? Would I be forced through an umbrella company, invoice and get paid net (?) or something else? Up until now, albeit operating within IR35, on a day to day basis I've had control of my company and the money flowing into and out of it. I've paid myself what I wanted, when I wanted, made pension contributions when I wanted, and sorted it all out just in advance of tax year end at which point the deemed employment calculation is due (one of the things this has facilitated is e.g. working 8 months of a 12 month period but smoothing my income and truing it all up at year end - I can't hold any significant funds in the company so I just pay myself everything and hold my 'war chest' outside in my personal name).

I'm assuming though that this will change for an inside IR35 public sector contract. How does it work with invoicing? Will they force me through an umbrella company, pay me 'net' (and will they contract with and hence pay me or MyCo?) I can't seem to wrap my head around how it will work with pension contributions etc (I don't like making them monthly, I prefer to see how the year goes and make a lump sum a the end of the year but am thinking this may not be possible with a brolly?)

Help gratefully received!

EDIT Seriously, I wonder about myself sometimes... NLUK, thanks, yes, entire subforum... I've started reading and can already see how pointless a thread this was to start... sorry folks.