IR35 Contract and Taxes - CONFUSED

[zathras]

I'm leaving a permanent position in 4 weeks to start my first contract. I have been told by the agency through which I found the contract that my contract with them will come under IR35. This seems to agree with the IR35 info I have read on the HMRC website, as I will be working for just one client, using their equipment, and if it wasn't for the fact that I will be working through my own limited company via an agency I would be an employee of the client.

Could anyone tell me:
1. When working under IR35, what could I roughly expect to take home each week for a 37.5 hour week at the rate of £26 per hour?
2. The client's premises are 50 miles away from my home, will I be able to claim for expenses for mileage? If so, if it costs me £50 per week in fuel, how much of that could I expect to get back in expenses?
3. Are there any other expenses or benefits I could claim?

I know my accountant will clear some of these issues up for me when I see her on Thursday, but I would like to try to understand some of this beforehand to avoid looking like a complete dunce!

Cheers.

Agents are the last people who you should consult on IR35 status and the HMRC ESM even more so.

Download a copy of the PCG Guide to Freelancing Which will give you more guidance than a simple forum posting.

[Old Greg]

What the others said.

I came into this believing 100% that I'd be caught inside IR35. I now think I almost certainly am not, and even if if I am, I fancy my chances as a PCG member to challenge the HMRC if they come after me.

You need to understand that the HMRC guidance is not even-handed (it's a mistake I made at first). They are on one side. You are on the other. It's in the HMRC's interest to maximise tax receipts, so take your advice elsewhere.

[malvolio]

And read the guides we keep recommending if you haven't already.

FWIW I agree that the reasons given do not put you inside IR35 in the slightest.

[NotAllThere]

1. According to one of the many IR35 tax calculators available on line, you'd get about £2,000 a month net pay. ( If you avoid IR35 - and btw, the advice from your agency is wrong in all important respects - this could rise to something like £2'700 a month). This is based on working 44 weeks a year. So about £550 vs £725.

2. You can claim from your ltd co 40p a mile up to a certain limit, then it drops to a lower rate. You can do this tax free for 2 years at the same location. After that (roughly) it becomes a BIK and is entirely taxable - i.e. not worth doing any more.

3. If you are subject to IR35, then you can only deduct for travel and subsistence expenses. All other expenses - computer equipment, accountancy fees come out of the 5%-of-gross-allowance the government so kindly left you with.

IR35 is frequently a matter of choice. Endeavour to be outside it. It isn't that difficult.

All of the above is subject to a certain about of nit-picking, and of course you should ask your accountant. Tell us what she says, and we'll tell you if she's right. :-D

[Mutley]

I'm leaving a permanent position in 4 weeks to start my first contract. I have been told by the agency through which I found the contract that my contract with them will come under IR35. This seems to agree with the IR35 info I have read on the HMRC website, as I will be working for just one client, using their equipment, and if it wasn't for the fact that I will be working through my own limited company via an agency I would be an employee of the client.

Could anyone tell me:
1. When working under IR35, what could I roughly expect to take home each week for a 37.5 hour week at the rate of £26 per hour?
2. The client's premises are 50 miles away from my home, will I be able to claim for expenses for mileage? If so, if it costs me £50 per week in fuel, how much of that could I expect to get back in expenses?
3. Are there any other expenses or benefits I could claim?

I know my accountant will clear some of these issues up for me when I see her on Thursday, but I would like to try to understand some of this beforehand to avoid looking like a complete dunce!

Cheers.