Reply to: 2yr rule, umbrella or own company

[r0bly0ns]

If all they have done is fill in the names, then it should be IR35 safe. As long as your working practices mirror the contract....

[swebb]

I've just compared it with the template and its basically the same except obviously they have filled in the bits where names need to be substituted!

[r0bly0ns]

Just found out the agency I am going through appear to use the PCG draft contract as a template !

So am I to take it this is good thing when attempting to indicate IR35 status ?

Cheers

Steve

Depends how much they change it

[swebb]

Just found out the agency I am going through appear to use the PCG draft contract as a template !

So am I to take it this is good thing when attempting to indicate IR35 status ?

Cheers

Steve

[swebb]

Agreed, but snag is if you've been running your current contract as IR35-caught, you may have a bit of trouble with Hector if you suddenly decide it isn't. Practically speaking it may be better to stay with the IR35 status until you get a new contract.

In terms of understanding IR35, well it's a bit of a moving goalpost at the moment since the courts have started re-interpreting perviously established guidelines, but you could do a lot worse than read the PCG's First Timer guide (and if you haven't joined already, why not... ). The key thing to note nowadays is that it is the reality of the arrangements that define the status, the contract is only used where there is ambiguity. I'm not sure the current guide emphasises that point.

Go to www.pcg.org.uk and look from there.

Thanks for the info Malvolio I think I need to contact an acountant in the next few days, have a chat about going Ltd and what services they offer. I obviously also need to get the contract checked, the pcg looks like a good plan.

Thanks

Steve

[malvolio]

Well to be honest after reading the IR35 rules a couple of years ago I kinda assumed I was based on the way I was working. Basicaly I drive to one place of work, use there computer kit, work to there plans and do a normal 7.5hr job. However there is another contractor here now who is Ltd and thinks he is outside IR35 but doesn't seem to offer any justifcation as to why.

The more I read about IR35 the more confused by it I seem to become, it looks like a total minefield. I suppose when I got the contract I just thought I didn't want the risk of the tax man catching up on me. However I thought it was only for 6 months or so but its been exteneded and extened and now it looks like running for another 6 months atleast.

So maybe its time to revisit the whole IR35 situation as well ... mmmmm

Thanks

Steve

Agreed, but snag is if you've been running your current contract as IR35-caught, you may have a bit of trouble with Hector if you suddenly decide it isn't. Practically speaking it may be better to stay with the IR35 status until you get a new contract.

In terms of understanding IR35, well it's a bit of a moving goalpost at the moment since the courts have started re-interpreting perviously established guidelines, but you could do a lot worse than read the PCG's First Timer guide (and if you haven't joined already, why not... ). The key thing to note nowadays is that it is the reality of the arrangements that define the status, the contract is only used where there is ambiguity. I'm not sure the current guide emphasises that point.

Go to www.pcg.org.uk and look from there.

[Alan @ BroomeAffinity]

Its definitely worth looking at. Give your accountant a ring and see if he can give an opinion on the contract. Or if your accountant isn't keen, contact Qdos or Bauer & Cotterell

[swebb]

I;ve never really been able to work out why anyone would use a brolly. I suppose there's convenience but that aside its just someone else grabbing a margin out of your income.

Even if you are fairly and squarely inside IR35 you can still take advantage of the flat rate VAT. Are you sure you are inside IR35? There's nothing in your original post to suggest this.

Well to be honest after reading the IR35 rules a couple of years ago I kinda assumed I was based on the way I was working. Basicaly I drive to one place of work, use there computer kit, work to there plans and do a normal 7.5hr job. However there is another contractor here now who is Ltd and thinks he is outside IR35 but doesn't seem to offer any justifcation as to why.

The more I read about IR35 the more confused by it I seem to become, it looks like a total minefield. I suppose when I got the contract I just thought I didn't want the risk of the tax man catching up on me. However I thought it was only for 6 months or so but its been exteneded and extened and now it looks like running for another 6 months atleast.

So maybe its time to revisit the whole IR35 situation as well ... mmmmm

Thanks

Steve

[scooby]

Eh?

what is the 'eh' for?

i'm part of an LLP yet they just tax and NI my earnings as they would in a normal umbrella. i just dont appear to pay Employers NI...

its all a bit weird. plus only used a umbrella to see me through the first year of contracting.

[DiscoStu]

The umbrella i use now classes me as outside of IR35 and I'm Limited Liability Partnership, however my return is still around 62%...

Eh?

[Alan @ BroomeAffinity]

I;ve never really been able to work out why anyone would use a brolly. I suppose there's convenience but that aside its just someone else grabbing a margin out of your income.

Even if you are fairly and squarely inside IR35 you can still take advantage of the flat rate VAT. Are you sure you are inside IR35? There's nothing in your original post to suggest this.

[Ardesco]

£27.50 a week = £1,430 a year.

That's more than my accountant costs, and my accountant saves me money.

What other reason do you need?

[scooby]

Thanks for the replies guys. Obviously umbrella's aren't well regarded The new price is £93 from memory which is a hell of a lot more than when I first used them !

I'll give one or two accountants a ring and see what kind of cost they are and what telephone maner they have.

I don't suppose anybody knows what the tax situation is when you jump ship from an umbrella and go Ltd but stay with the same client and the same location ? My situation will be slightly complicated also because the work via the umbrella is less than 2yrs at the clients site, but the new contract via a Ltd company if I set one up will over 2yrs working at the same site. I'm not actually sure if when switching to Ltd if this resets the 2yr period, I suspect not.

Thanks again

Steve

i was with Parasol last year, then left due to poor service, and am currently in the process of setting up my Ltd Co with a usual suspect off CUK. his fees are about the same as the new Parasol fees, how you'll get a lot more from him!!

The umbrella i use now classes me as outside of IR35 and I'm Limited Liability Partnership, however my return is still around 62%... Ltd looks to be the best way forward, and everyone i know has never gone back to Umbrellas once Ltd.

[swebb]

Thanks for the replies guys. Obviously umbrella's aren't well regarded The new price is £93 from memory which is a hell of a lot more than when I first used them !

I'll give one or two accountants a ring and see what kind of cost they are and what telephone maner they have.

I don't suppose anybody knows what the tax situation is when you jump ship from an umbrella and go Ltd but stay with the same client and the same location ? My situation will be slightly complicated also because the work via the umbrella is less than 2yrs at the clients site, but the new contract via a Ltd company if I set one up will over 2yrs working at the same site. I'm not actually sure if when switching to Ltd if this resets the 2yr period, I suspect not.

Thanks again

Steve

[Chugnut]

Hi,

I've been using parasol for a fair while, today they put the price up yet again. This kicked me into gear and got me wondering if I should still be using and umbrella or not. I've read the first time thread and a few others but I'm not too sure these cover my situation.

I've been in the current contract for almost 2yrs and its within IR35 (on site, clients kit ......). So I won't be able to claim mileage or subsistence soon I'm now wondering if maybe I should set up a company and use SDJ or NW or someone like that but its not clear to me if this is worthwhile financially as I will be in a 2yr+ contract and some of the tax break are gone then.

Pensions is also a concern. At the moment I have one via parasol which has good tax breaks. Not to sure about pensions when setting up by yourself though and if the tax breaks are as good.

Any views ?

Thanks

Steve

Steve, although more hassle than the umbrella option, I really would go limited + recommended accountant every time. Everyone's circumstances are different, but if your next contract is outside IR35, the umbrella doesn't care and will still 100% PAYE you. Why take that hit?

I'd also really advise being responsible for your own invoicing and admin as well, rather than rely on some umbrella payroll goon. I've experienced problems here first hand; get 'em out the payment chain!