Contract dilemma

[Sally@InTouch]

I have been offered a 6 month IT contract which may be extended. Having read http://www.hmrc.gov.uk/ir35/guidance.pdf it appears that the contract falls under IR35 because I will be on the client site for 5/6 days a week and performing 'out of hours work'. What does that mean for me ? Should I not take the contract ? IR35 confuses the hell out of me.

If I were to use an Umbrella company, do they make deductions to take the fact that the contract falls under IR35 ? I thought the idea behind all Umbrella companies was to avoid IR35.

What legal method, would allow me to take the contract with the least hassle, I would prefer not to setup a Ltd company, did that many years ago and would never do it again, way too much hassle.

Thanks for any advice.

I would recommend having your contract reviewed professionally before deciding on which trading option to take.

[Support Monkey]

I have been offered a 6 month IT contract which may be extended. Having read http://www.hmrc.gov.uk/ir35/guidance.pdf it appears that the contract falls under IR35 because I will be on the client site for 5/6 days a week and performing 'out of hours work'. What does that mean for me ? Should I not take the contract ? IR35 confuses the hell out of me.

If I were to use an Umbrella company, do they make deductions to take the fact that the contract falls under IR35 ? I thought the idea behind all Umbrella companies was to avoid IR35.

What legal method, would allow me to take the contract with the least hassle, I would prefer not to setup a Ltd company, did that many years ago and would never do it again, way too much hassle.

Thanks for any advice.

Take the contract because as you say your not going to setup a ltd co so therefore whichever other option you take IR35 does not effect you

Umbrella company = employee of the unbrella company, the umbrella is liable for all tax and NI deductions from you, IR35 is irelevant and does not have any effect on you, you will however earn slightly less money

self employed = you are liable for tax and NI yourself through self assessment however most agency will not touch you with a barge pole

Ltd co = employed by your own company, your company is liable for paying your tax and NI, you can take money out as dividends instead of PAYE paying less tax however this is where IR35 comes in to stop people working in the same way as all the other clent employees (being controlled and using the client working practices as an employee)

[DaveB]

You could just register yourself as self employed and declare your income through your tax return - although I think the umbrella option would be less hassle.

The down side to the self employed route is that most agencies won't go near you. OP didn't say if they got the gig direct or not, but may clients are wary of working with self employed contractors as well.

Ltd with a decent accountant is the most efficient way to go and any of the decent ones will be able to give advise on IR35. PCG Plus Membership or Insurance through the likes of QDOS will also give you peace of mind.

Brolly is a lot less effort on your behalf, but it will cost you money in the long run.

Get your contract and working arrangements checked out, you may well find you are not as caught as you thought you were, or there is room for manouver in negotiating the contract terms if you are working with an agency.

[SarahL2012]

What legal method, would allow me to take the contract with the least hassle, I would prefer not to setup a Ltd company, did that many years ago and would never do it again, way too much hassle.

Thanks for any advice.

You could just register yourself as self employed and declare your income through your tax return - although I think the umbrella option would be less hassle.

[Old Greg]

I have been offered a 6 month IT contract which may be extended. Having read http://www.hmrc.gov.uk/ir35/guidance.pdf it appears that the contract falls under IR35 because I will be on the client site for 5/6 days a week and performing 'out of hours work'. What does that mean for me ? Should I not take the contract ? IR35 confuses the hell out of me.

If I were to use an Umbrella company, do they make deductions to take the fact that the contract falls under IR35 ? I thought the idea behind all Umbrella companies was to avoid IR35.

What legal method, would allow me to take the contract with the least hassle, I would prefer not to setup a Ltd company, did that many years ago and would never do it again, way too much hassle.

Thanks for any advice.

HMRC is not impartial. They want your money. Get proper advice.

[cojak]

If I were to use an Umbrella company, do they make deductions to take the fact that the contract falls under IR35 ? I thought the idea behind all Umbrella companies was to avoid IR35.

What legal method, would allow me to take the contract with the least hassle, I would prefer not to setup a Ltd company, did that many years ago and would never do it again, way too much hassle.

Thanks for any advice.

The point of most Umbrellas (the ones that advertise on this site) is the opposite. But if you don't want the hassle or the fear of HMRC knocking on your door, they are the best way forward for you.

[Wanderer]

What legal method, would allow me to take the contract with the least hassle, I would prefer not to setup a Ltd company, did that many years ago and would never do it again, way too much hassle.

If you want the easiest route then go with an umbrella and you won't have to worry about IR35 because it only affects LTD company contractors. As long as you don't try to fiddle your expenses it's 100% legal and straight.

Do have a look at one of the calculators to see what the tax difference between LTD and umbrella is though, it might change your mind....

[piriton]

I have been offered a 6 month IT contract which may be extended. Having read http://www.hmrc.gov.uk/ir35/guidance.pdf it appears that the contract falls under IR35 because I will be on the client site for 5/6 days a week and performing 'out of hours work'. What does that mean for me ? Should I not take the contract ? IR35 confuses the hell out of me.

If I were to use an Umbrella company, do they make deductions to take the fact that the contract falls under IR35 ? I thought the idea behind all Umbrella companies was to avoid IR35.

What legal method, would allow me to take the contract with the least hassle, I would prefer not to setup a Ltd company, did that many years ago and would never do it again, way too much hassle.

Thanks for any advice.