Any Advice ?

[Boney M]

No, never heard of them until I just did a google search.

Oh, I know they just let go a load of SDM's on Friday

[Wanderer]

I am seeking advice from an accountant early next week but would like to know where I stand before I go there.

So ask the accountant:

Having reviewed my contract and working practices, do you think this engagement would be inside or outside of the IR35 rules

The answer to that question will determine how to proceed. If you are going to be IR35 caught then seriously consider the umbrella or agency PAYE option because it's the least hassle.

If you think you can work outside IR35 then you need to consider forming a LTD company. An accountant will typically charge £75 to £150 per month to deal with your accounts and you will also have to get several different types of insurance which will cost a few hundred per year. I'm sure your accountant would be happy to refer you to an insurer or you can do a search here to see who the usual suspects are and what they charge.

You also need to consider the implications of how you are going to draw money from your company. If you have enough cash at hand then you may want to consider deferring taking any salary/dividends from your company until 6th April when the new tax year starts. If you don't then you could easily end up creating a big tax liability for yourself which will give you a nasty shock when you do your self assessment in about a year's time. Get your accountant to look at your P60 to see how much you have earned so far this year and figure out what the best course of action is.

[northernladuk]

What exactly is the role? BAU or project based. The 7 years experience starts ringing some bells. If it is that long and expected to be the same there could be an argument for you being a disguised employee. Add to this the fact they can't sign it off as full time so have opted to pay as contract for 3 days.

Devil is in the details but that situation starts to look slightly iffy to me.

[Contreras]

...

They are going to give me a contract.

So which would be the best way to go to maximise my return.

On the first point have a read of this thread: http://forums.contractoruk.com/busin...ml#post1821690

On the second point it's not just about maximising return. Ltd Co. gives you flexibility and control over the earnings and it comes with responsibility, with an Umbrella you lose the flexibility and hand over the control and responsibility to someone else - make that the starting point for your decision.

However from a tax perspective, as you've already received some salary this year and potentially a (taxed?) lump sum pay-off, then a Ltd would be more efficient if you could manage to leave some profits in the company to be taken as salary next year when perhaps you will be out of work. You might not even need PAYE set up this year if you only take dividends.

Your services were previously contracted to the customer by your ex-employer through a business contract. If they continue to view it that way, and not that they are engaging a temporary employee, then IR35 is less of a concern. Much of that will be down to how you present yourself to the customer, as 'you' or as a business with wider ambitions, and that in turns on how you view it yourself.

[Old Greg]

I have a contract with my client to provide up to 78 days professional services over 6 months:

Prob good for ir35
I get full contract value even when I take holidays
Client gets flexibility as they have peaks and trough in their demand for service.

Think like a business and propose this model.

[mudskipper]

Thanks for the reply.

I am not hancuffed by my current employee.

I am subject to a compromise aggrement so I wont go into why I am being made redundant but all I will say is I asked for it.

There is work at the customer, but they are offering me more as a contractor, they basically dont want to lose my 7 years experience with them.

I will be doing a similar job, providing ERP support but also as they dont have any local IT support I will also get involved in that as well.

I fully understand that after 6 months that could be it, I either then have to find another contract or get a full time job.

I could only get 3 days a week, they could not get 5 days approved. I have a chance early next year to be involved in another customer, using up the remaining 2 days.

They are going to give me a contract.

So which would be the best way to go to maximise my return.

To maximise your return, you should go via a Ltd company and register for flat rate VAT. However, running a limited company has responsibilities, hassles and expenses (accountancy). If you're inside IR35, it's probably not worth it - you'll be very little better off, so you have the option of going via an umbrella and saving yourself the hassle. If you're only going to be contracting for 6 months, you may want to think whether it's worth setting up and closing down a company for such a short stint.

Read the newbie guides --->
Lots of good stuff.

[Sockpuppet]

Talk to ContractorUmbrella. They post on here. For you they'll just pay you PAYE rates, don't have to worry about IR35 as Umbrellas don't fall under to scope as you're paying full PAYE. It's £900 a week to look for a new job if you think of it like that.

If your in IR35 there is no real way to maximize your return. Your stuck paying normal PAYE rates.

[ScottishGuy]

Was this from

Kelway?

No, never heard of them until I just did a google search.

[Boney M]

Was this from

Kelway?

[ScottishGuy]

Thanks for the reply.

I am not hancuffed by my current employee.

I am subject to a compromise aggrement so I wont go into why I am being made redundant.

There is work at the customer, but they are offering me more as a contractor, they basically dont want to lose my 7 years experience with them.

I will be doing a similar job, providing ERP support but also as they dont have any local IT support I will also get involved in that as well.

I fully understand that after 6 months that could be it, I either then have to find another contract or get a full time job.

I could only get 3 days a week, they could not get 5 days approved. I have a chance early next year to be involved in another customer, using up the remaining 2 days.

They are going to give me a contract.

So which would be the best way to go to maximise my return.

[northernladuk]

First off you need to check your contract. It is possible you could have a handcuff which doesn't allow you to work for customers of your ex-employer. It is highly possible that your ex-employer and customer has a non poaching agreement which you also could fall foul of. You need legal advice before you do anything else. Breaching could be very messy. You could negotiate your way out of it though I guess.

Second is why is your employer making you redundant if there is work at the customer? Probably not relevant, just struck me as odd.

After that you need to take long look at the newbie guides to the right. The IR35 is odd. Generally going back you your employer could be a flag in certain circumstance but you are not, you are going back to the customer but as you were with an outsourcer it could be argued you are still doing the same job. Question is will the role you are doing be related to the one you previously did. If not I think you should be ok from the employer taking you on side of things. You still have to consider how the you new 'client' will view you as we all do. If he is taking you on to a role that he view will be permanent eventually then yes, you have an issue to deal with. If he is willing to treat you as a supplier, as he already has, then you should be ok. It is impossible for us to even guess with the little information you have given.

You need to understand the line about agent or limited company a lot better. You still need to be a limited company to go through an agent (lets forget umbrellas for the moment). The two options you might have are go direct or go through an agent. Whichever it is you still need to be a limited company. Get a grasp on this, you will be running a business so need to start thinking that way.

Do not, under any circumstances, bank on another contract or a permie position. Contracts get pulled at the last minute for a host of reasons. Clients take on contractors because we are supposed to be experts and also we are a flexible workforce. If he needs to get rid or not extend they will do it in a heartbeat. It's why they use us. The other thing is if you expect him to give you work and he expects to give you it then you fall foul of mutuality of obligation as well which will be a huge problem for IR35. The only time we have something for certain is when we sit down on the first day at the client with a signed contract. Anything else is just empty promises and hot air.

Have to ask why you are interested in a 3 day a week contract though? Why not do it properly and get a 5 day a week one. It might be worth taking to get a contract under your belt as you are always on the back foot as a newbie but I would certainly be looking at other options. You can't look a gift horse in the mouth sure... but for 2.4k a month out of your (limited co's) pocket? Not the best of gigs.... unless it's what you want of course.

Also back to the agency thing. Your commitment is to the agency as that is who the contract is with, not the client. The client pays the agency the full whack, you get a cut of the agencies money. As I said before, get this straight. Thinking you and the client are the key relationship is wrong. Things have changed considerably now from your permie land. You are a contractor that is contracted to the agency and working for his client. Always nice to have the client on your side though... just remember he is your customer now, nothing more.

Hope some of this rambling makes sense and is useful......

Oh, and any questions about limited, expenses, accountants and anything else you haven't thought of yet can be found in this forum using the search option as detailed in the Welcome Section.

[ScottishGuy]

Hi,

I am going to be made redundant next month from a I.T. services company.

One of my customers has offered me a 6 months contract which could either lead to a further contract or full time job.

They have offered me £300 p/d, 3 days a week. Mostly working from Home, but they would pay travel and hotel accommodation if required.

I have an option of using an Agency that they use and they would pay the cost of the Agency or start a Limited company.

I am new to all this so any advice would be appreciated, also would I fall into IR35.

I would also need to buy a laptop, which I suppose could be bought by the the limited company if I go that way.

I am seeking advice from an accountant early next week but would like to know where I stand before I go there.

thanks in advance.