Umbrella vs Ltd - A small point for newbies

[Jessica@WhiteFieldTax]

Theres some good advice here, which I concur with. I see a lot of selective advertising around rates and take home, and alas some clients get taken in by it.

I suspect any of us advising contractors have had the calls from clients saying they've been quoted 82% take home by X, can you beat it. I just sigh, and try and second guess whether the caller is worth the effort in explanations.

One got very huffy when I wouldn't do a line by line comparison between my estimate of his take home, and someone elses.

And, yes, get IR35 understood at the start: far better to understand, and not need, than vice versa. For people who simply don't want to invest the time in understanding, then PSCs aren't the right route.

[Sally@InTouch]

There have been a few threads recently about brolly v Ltd take home with take home of around 80% being quoted as standard for a Ltd Co - can I just point out to any newbies out there that this would be dependent on you working outside IR35; inside IR35 there is not much difference between take home from a brolly or Ltd. Anyone new to this game should make sure that they fully understand IR35 and fully understand the implications for getting it wrong.

Nice one Lisa!

I would like to add, after several conversations on the subject with newbies this week, do not compare one accountants percentage retention to another on the calculator tools. Every accountant, providing they're good, will get you the same rate. Allowable expenses are the same, not higher with other providers like an umbrella service can be.
There are also various factors, rates and allowances that one may use, but not another.

[escapeUK]

Anyone new to this game should make sure that they fully understand IR35 and fully understand the implications for getting it wrong.

IR35 | PCG

This is a great read for new contractors, and puts into context Lisa assertion that there are implications for getting it wrong. Statistically the chances of getting it wrong and there being any sort of implication seems very very very small, as one would assume that HMRC wouldnt be pursuing people who are clearly outside?

Of all the cases PCG's expert advisers have been involved in, PCG members have won 1,485 cases and HMRC has won just 8 (correct as of March 2010).

A more recent figure would be nice though.

[LisaContractorUmbrella]

There have been a few threads recently about brolly v Ltd take home with take home of around 80% being quoted as standard for a Ltd Co - can I just point out to any newbies out there that this would be dependent on you working outside IR35; inside IR35 there is not much difference between take home from a brolly or Ltd. Anyone new to this game should make sure that they fully understand IR35 and fully understand the implications for getting it wrong.