Reply to: New contract,

[malvolio]

T'other way round. If you are in an umbrella company you pay the same amount of tax whether you're in IR35 or not. And it's probably more than you'd pay as a ltd co in IR35.

Just to expand that slightly, IR35 is meant to ensure you pay the same tax as a permie (less a small amount for admin costs), if you are working as a permie. But if you work through an umbrella, you pay tax as a permie anyway because you are in effect employed by the umbrella. Therefore IR35 simply does not apply.

So through an umbrella you pay full tax on your income less the umbrella fees. However, inside IR35 but with your own company, you pay tax on 95% of your gross so you may wind up with more income at the end of the day than if you brolly it.

[TheFaQQer]

I didn't think you could opt out if your were working through an umbrella? Than again, I have been known to be wrong on occasion

The opting in is based on the relationship between employee and the agency.

You can still opt in through an umbrella, but need to get the umbrella to opt in as well as you.

[NotAllThere]

Hmm ok I am a bit confused now... so if you are in an Umbrella company you are not inside IR35? Then shouldn't everyone be in an Umbrella?

T'other way round. If you are in an umbrella company you pay the same amount of tax whether you're in IR35 or not. And it's probably more than you'd pay as a ltd co in IR35.

[DiscoStu]

There's a surprise - opting in does not make you an employee, but it can give you more rights and make the agent do some more work.

In particular, opting out means they can restrict your ability to go direct in the future, plus whether they have to pay you or not.

Get her a first-timers guide and read up on it.

I didn't think you could opt out if your were working through an umbrella? Than again, I have been known to be wrong on occasion

[TheFaQQer]

The agent recommended her to opt out, so she can be removed from being an employee from the client she will work for.

There's a surprise - opting in does not make you an employee, but it can give you more rights and make the agent do some more work.

In particular, opting out means they can restrict your ability to go direct in the future, plus whether they have to pay you or not.

Get her a first-timers guide and read up on it.

[kellycell]

Hmm ok I am a bit confused now... so if you are in an Umbrella company you are not inside IR35? Then shouldn't everyone be in an Umbrella?

[Bluebird]

She is thinking of an umbrella, since she is a 1st timer.

Should she give the contract to an accountant to check it for IR35? The agent does not think it will fall inside it.
How long does it usually take to be checked and what happens if it fails in it?

What happens with regards to travelling? Will the transporation, accomodation, food come out of ther pocket?

thank you

If she is going with umbrella, then IR35 doesn't come into it.

She pays full PAYE on whatever is left AFTER the fess and expenses are deducted.

She will probably pay for the transport to and from the gig herself as well as accomodation etc, however she will be able to claim these as expenses - that doesn't mean she doesn't pay for them - it just means they get paid BEFORE TAX as opposed to AFTER TAX - which can be worth a few quid.

Be very careful though what she claims - what the umbrella companies tell you that you can clim and what the tax man will allow are entirely differnt sometimes.

[kesm]

She is thinking of an umbrella, since she is a 1st timer.

Should she give the contract to an accountant to check it for IR35? The agent does not think it will fall inside it.
How long does it usually take to be checked and what happens if it fails in it?

What happens with regards to travelling? Will the transporation, accomodation, food come out of ther pocket?

thank you

[Bluebird]

is she going to be paid via an Umbrella Company or is she setting up her own Ltd company to do this ?

[MrRobin]

Because the agency is being the intermediary and facilitating the service she will provide to the client. The client will have a contract with the agency too.

Yes ofcourse she can take holiday. Infact as a contractor you are able to just say "I'm off next week, see you on the 22nd" because you aren't an employee and bound by the regulations of the client i.e. filling in holiday forms etc etc. However if she does say this and she is also supposed to deliver work that week then don't expect the client to want you coming back.

Unless she has an arrangement with the client and it is in the contract then yes. They can be charged as business expenses (i.e. her ltd company) tho, subject to various other regs you can read about on this site or several others such as <removed> etc

[kesm]

The agent recommended her to opt out, so she can be removed from being an employee from the client she will work for.

Why is the contract between herself and the agency, instead of herself and the client?

Also, can she have days off during the contract? I assume she will have to arrange that with the client before arranging anything.

Lastly, if she has to travel for business, will the transportation, hotels and food be out of her own pocket?

Thank you.

[malvolio]

Interesting that the content is an "opt out" of agency regs, but the letter states that you need to confirm ID as per those same regs.

Surely if you opt out you don't have to prove your identity ?

Not a big thing I know - but just another case of the agencies not understading what they are on about ?

Th ID thing is embedded ina load of different places these days. You can either have hysterics about it or go along with them.

One option around passports: a copy is not proof of ID unless it is taken in the presence of the person who requires such proof and then only as a record. So you take a copy of your passport in the presence of someone from YourCo (like yourself, or at a pinch the CoSec). YourCo can then use that copy to affirm to anyone else who has a right to ask that you are who you say you are. Simply send them a PDF of your saved copy as evidence...

[Bluebird]

Interesting that the content is an "opt out" of agency regs, but the letter states that you need to confirm ID as per those same regs.

Surely if you opt out you don't have to prove your identity ?

Not a big thing I know - but just another case of the agencies not understading what they are on about ?

[TheFaQQer]

Any views on this?

I just want to know if:

1) Is this the kind of contract she can show to an accountant in order to see if she is within IR35 or not?

2) Also what else does she need to do before she starts?

1 - No. You need T&Cs as well

2 - Work out whether she really wants to be opting out of the agency regulations or not before signing it.

[Qdos Contractor]

This looks like the schedule to a contract. It mentions some 'Terms and Conditions' - does your flatmate have a copy of these? They'll need to be submitted for IR35 review.

PM me if you want more info.