Reply to: New to contracting - oversea client - in/out IR35 - umbrella/ltd - uk/europe

[northernladuk]

In the contract, it states the following:


Should I consider the employment to be outside IR35 despite receiving stock options etc?

It's not employment. You need to go back and learn the fundamentals which will make this ride a little smoother.

[Lance]

In the contract, it states the following:


Should I consider the employment to be outside IR35 despite receiving stock options etc?

receiving stock options?

I think you're being taken for a ride. Forget IR35/tax for a minute.

- Are they going to pay you properly? By properly I mean market value ££££ not options.
- Why do they want you when they have no presence in the UK?
- What does being in the UK add that they don't already have? And why don't they simply establish a UK/EU wing of the business?
- Why would they not consider an umbrella? Seems very odd to avoid the simplest legal way to hire a UK worker.

There's summat fishy here.... The stock options set off my spidey-sense as that's just jam tomorrow.

[0xsrwea31]

In the contract, it states the following:

INDEPENDENT CONTRACTOR. You agree that you are an independent contractor, and not our agent or employee. You don’t have the authority to bind us, by contract or otherwise. You will perform the Services under our general direction, but you will determine, in your sole discretion, the manner and means by which you accomplish the Services.

Should I consider the employment to be outside IR35 despite receiving stock options etc?

[cojak]

Another point that we haven't really discussed here is that there are some umbrella companies like that claim to be super tax-efficient. I've searched the forum but couldn't really find anything about that. Does anyone have any experience with them?

I have removed your link because it’s only super efficient for the provider, NOT the contractor using them.

But we do have posters with experience with them, they are all in this forum: https://forums.contractoruk.com/hmrc-scheme-enquiries/

[0xsrwea31]

Isn't the difference just in the NI class I would be paying? It sounds like as a DPNI, I'd pay Class 1 employee while, as a sole trader, I'd pay Class 2 and 4. Overall, the amount is very similar as far as I understood.

[NotAllThere]

Update: the client is not ok with me using an umbrella company. What is the best path forward?

What's the difference in terms of taxes etc between being a sole trader and using the DPNI scheme?

The NI scheme is different. You pay more through DPNI.

[0xsrwea31]

Update: the client is not ok with me using an umbrella company. What is the best path forward?

What's the difference in terms of taxes etc between being a sole trader and using the DPNI scheme?

[jamesbrown]

Sure, you can always get insurance, but insurance is expensive for a high amount of cover if the jurisdiction and/or governing law is a US state and insurance is always partial/limited, whereas limited liability is a hard backstop.

[0xsrwea31]

You make a significant mistake, client considers you liable, client brings a legal case in the relevant jurisdiction, you lose, which means you probably lose everything, house, everything. In other words, limited liability means something. I only deal with US clients through my company and with all relevant insurance in place for the jurisdiction in which the contract is written.

Do you know if it's possible to get personal liability insurance as a sole trader? Maybe I could just get that but still be able to save in terms of Employer NI. I'm seeing several websites that provide that for just a few pounds a month.

Find a country that has lower tax and lower other employment related deductions - and will permit you to work in that way.

Do you have any recommendations? I've heard many people are moving to the canary islands but the rates don't seem that low. But maybe I'm missing something?

[NotAllThere]

Since they are not based in the UK, I could potentially evaluate the idea of moving abroad and working from there. Does anyone have any suggestions/experience on where this would be beneficial from a tax perspective?

Find a country that has lower tax and lower other employment related deductions - and will permit you to work in that way.

[northernladuk]

Another point that we haven't really discussed here is that there are some umbrella companies like<mod snip> that claim to be super tax-efficient. I've searched the forum but couldn't really find anything about that. Does anyone have any experience with them?

Not too sure what search you are using but put 'tax efficient umbrella site:forums.contractoruk.com' in to google and you'll get a raft of warning posts. There is no legal thing as a super tax efficient umbrella and we, as mentioned, an entire sub forum full of people paying the price for falling for it.

[Whitelime]

Another point that we haven't really discussed here is that there are some umbrella companies like <mod snip> that claim to be super tax-efficient. I've searched the forum but couldn't really find anything about that. Does anyone have any experience with them?

Don't be tempted by anything "super tax-efficient". Look into the HMRC Scheme Enquiries section of the forum and you'll get the picture.

[0xsrwea31]

Another point that we haven't really discussed here is that there are some umbrella companies like <mod snip> that claim to be super tax-efficient. I've searched the forum but couldn't really find anything about that. Does anyone have any experience with them?

[0xsrwea31]

I’m intrigued. I understand equity. But I’ve never come across a contract with holiday pay in it. What’s the logic here?

They just don't have a UK presence but would like to give me all the benefits of a normal employee.

[jamesbrown]

I’m intrigued. I understand equity. But I’ve never come across a contract with holiday pay in it. What’s the logic here?

That there is an employer who wants an employee...