Reply to: Difference between inside and outside contracts for Umbrella company route

[Lance]

Without any of the benefits of actually being an employee

You get holiday pay and sick pay. No employer pension, no redundancy (it's a temp job so that's fair), and no job security (it's temp so that's fair).
So all the benefits except pension.

[Wobblyheed]

if you use an umbrella, IR35 is no longer relevant. You will pay PAYE tax and NICs.

Without any of the benefits of actually being an employee

[PerfectStorm]

This thread reminds me of the received narrative last year on here - close your companies and take a job in Tesco

[northernladuk]

I suppose technically the point is that the second you're brolly the "gig", as it pertains to you, is neither inside or outside. You're completely removing the element of IR35 and so any SDS is just immaterial and not applicable. It doesn't need an SDS, and it might as well not exist.

It's an intereting point. The SDS should have been done on the role before it's advertised doesn't it. They can they state it's inside our outside when looking. The way the OP wishes to get paid is a separate issue. I know it doesn't matter in this case but just an interesting situation. Role gets an SDS, goes out for people to apply, Joe blogs takes it but decides to go brolly. They aren't linked. Dunno what difference it makes in any situation if he's gone brolly but still the process should be followed in discreet steps shouldn't it?

[vwdan]

I think he knows that as he's already stated he needs to use a brolly. Technically, using a brolly doesn't make the gig inside though does it? He can still have an SDS stating outside but go through a brolly. Not sure that level of pedantry makes any difference whatsoever but it's still worth being technically accurate with the sitaution?

I suppose technically the point is that the second you're brolly the "gig", as it pertains to you, is neither inside or outside. You're completely removing the element of IR35 and so any SDS is just immaterial and not applicable. It doesn't need an SDS, and it might as well not exist.

[rocktronAMP]

the TAAR rule is based on how yo got the money out. If you took a capital distribution then TAAR applies. If you took dividends and struck off the company it doesn't.

IANAL

Ah ha! Thanks - basically there was scarely anything in it after to paying all the dues ..

[Lance]

If you have "struck off a LTD company" does this rule about 2 years can go back to and acceptable contracts apply?

the TAAR rule is based on how yo got the money out. If you took a capital distribution then TAAR applies. If you took dividends and struck off the company it doesn't.

IANAL

[rocktronAMP]

If you have gone through MVL, then you will have to use an umbrella (and be inside). It will be 2 years before you can use a Ltd (and accept outside contracts) for the same line of work.

People only use MVL if they move from contracting to permanent employment.

If you have "struck off a LTD company" does this rule about 2 years can go back to and acceptable contracts apply?

[GhostofTarbera]

And your 550 a day becomes 286 in your pocket

[indianguy]

Someone touted that as an option on a different thread and got shot down. Where there might be something in the theory I can't believe HMRC are going to be pleased you've used a mechanism and then backtracked when it suits you to pay less tax to them.

IMO you've made the decision, gained a very tasty tax advantage so now have to see it through. Lets call it a tax on short sighted thinking. You aren't the first and judging by the number of knee jerk MVL posts we've seen I am sure there is going to be many many more to come.

Agree, I accept my short sighted action and go with the Umbrella option.

[BlasterBates]

Thank you. Yes, thats my exact question. Also is there a way to pay back the tax relief that I received so that I can open another limited company? or would that open another can of worms?

It looks like you probably can, but you'll need the advice of an accountant to make sure you don't get on the wrong side of HMRC, as the tax will need to be refunded, and potentially you could face penalties.

https://www.businessrescueexpert.co....y-liquidation/

[northernladuk]

Thank you. Yes, thats my exact question. Also is there a way to pay back the tax relief that I received so that I can open another limited company? or would that open another can of worms?

Someone touted that as an option on a different thread and got shot down. Where there might be something in the theory I can't believe HMRC are going to be pleased you've used a mechanism and then backtracked when it suits you to pay less tax to them.

IMO you've made the decision, gained a very tasty tax advantage so now have to see it through. Lets call it a tax on short sighted thinking. You aren't the first and judging by the number of knee jerk MVL posts we've seen I am sure there is going to be many many more to come.

[indianguy]

I think he knows that as he's already stated he needs to use a brolly. Technically, using a brolly doesn't make the gig inside though does it? He can still have an SDS stating outside but go through a brolly. Not sure that level of pedantry makes any difference whatsoever but it's still worth being technically accurate with the sitaution?

Thank you. Yes, thats my exact question. Also is there a way to pay back the tax relief that I received so that I can open another limited company? or would that open another can of worms?

[northernladuk]

If you have gone through MVL, then you will have to use an umbrella (and be inside). It will be 2 years before you can use a Ltd (and accept outside contracts) for the same line of work.

People only use MVL if they move from contracting to permanent employment.

I think he knows that as he's already stated he needs to use a brolly. Technically, using a brolly doesn't make the gig inside though does it? He can still have an SDS stating outside but go through a brolly. Not sure that level of pedantry makes any difference whatsoever but it's still worth being technically accurate with the sitaution?

[Lance]

I have two offers (Inside IR35 - £550 and Outside IR35 - £550) but as per my situation (Claimed entrepreneurs tax relief last year) I will have to go through an Umbrella company. If we go through an umbrella is there any difference between the inside and outside contract rates? Would the take home pay be the same? I heard we don't need to pay Employer's NI for the Outside IR35 contract (Public sector), can someone please explain if this is possible? Thanks

if you use an umbrella, IR35 is no longer relevant. You will pay PAYE tax and NICs.