Moving to an Inside IR35 role having done Outside roles

[mogga71]

If he is then he's in danger of falling foul of the MSC marlarky that is currently going on.

If he MVL's and gains a tax advantage from it he can't open another LTD for two years. We've a trickly of people that have grabbed this one without thinking and now their inside gig comes to an end they are stuck with umbrellas for two years so needs very careful consideration. Many people regretting their decision and bet there are many many more than have illegally re-opened a LTD without a clue of the new legislation.

Yip agreed on the 2 year issue but if he/she is in the FS sector then the chances are they will want/have to stay in that sector. The chances of the banks etc suddenly changing course and offering outside roles again are, IMHO, pretty slim. I am in the same boat .... just 2 years earlier than him/her. Weighed up the options, used MVL to close the company and I very much doubt I will ever open up a new company again. The way things are going it seems that doing anything outside of ir35 is risky as HMRC seem to be able to continually bend the laws in their favour and could come back to bite you in the future.

But yeah ... agreed, if the poster is all for getting an outside gig again then they need to consider the 2 year issue.

[northernladuk]

Pardon my ignorance, but what do you mean by 'My current accountant is not on the preferred list of suppliers for umbrellas so things will need to be kept separate'? What has an umbrella company got to do with an accountant? Do you mean that you were hoping that your accountant offered an umbrella service option?

If he is then he's in danger of falling foul of the MSC marlarky that is currently going on.

I am guessing that you are in the Financial Services sector ... hence the blanket ban on all limited companies. As a matter of interest, have you not thought about doing an MVL and closing the company down? This seems to be the road that many such contractors in the FS sector have taken. After your accountant has done your final accounts then you won't need him anymore.

If he MVL's and gains a tax advantage from it he can't open another LTD for two years. We've a trickly of people that have grabbed this one without thinking and now their inside gig comes to an end they are stuck with umbrellas for two years so needs very careful consideration. Many people regretting their decision and bet there are many many more than have illegally re-opened a LTD without a clue of the new legislation.

[mogga71]

In my area of expertise things have moved into a state where companies are blanketing inside and therefore I’ve had to take an inside role, or risk being out of a role for a while / taking low rates.

1 - should I be letting my accountant know that I’ll now be working through an umbrella company now for payroll. My current accountant is not on the preferred list of suppliers for umbrellas so things will need to be kept separate

2 - how does working through an umbrella affect things like self assessment going forward? Will I have to get an output of monies in / out from the umbrella relating to my payment at some point to share with my accountant for SA going forward as my LTD is doing nothing?

On the plus side I am paying half my accountant fee now since it’s largely just there kind of dormant.

Anything else I’m missing or should be aware of having moved from outside to a more inside way of getting paid.

Also anyone got any recommendation for umbrellas or are they all the same, I’m thinking of Pendragon so would be keen to hear of any others / experiences.

Pardon my ignorance, but what do you mean by 'My current accountant is not on the preferred list of suppliers for umbrellas so things will need to be kept separate'? What has an umbrella company got to do with an accountant? Do you mean that you were hoping that your accountant offered an umbrella service option?

I am guessing that you are in the Financial Services sector ... hence the blanket ban on all limited companies. As a matter of interest, have you not thought about doing an MVL and closing the company down? This seems to be the road that many such contractors in the FS sector have taken. After your accountant has done your final accounts then you won't need him anymore.

[eek]

MSC has been round since day dot right? This looks like an easy win for HMRC hence the push from them. Before this it was just the threat of an investigation into IR35...it's never ending - is any accountant safe? Who's to say they don't go after every accountant if it's an easy win for them?
I'm with an accountant that uses FreeAgent which makes things a little better I guess.


How does me paying a lesser fee for downtime in a company constitute MSC behaviour specifically?

They make a profit when you are working (because you pay a lower fee when you aren't working).

Or going forward - they might be providing an additional service (i.e. umbrella payroll) for free when your limited company isn't earning money.

[northernladuk]

MSC has been round since day dot right? This looks like an easy win for HMRC hence the push from them. Before this it was just the threat of an investigation into IR35...it's never ending - is any accountant safe? Who's to say they don't go after every accountant if it's an easy win for them?
I'm with an accountant that uses FreeAgent which makes things a little better I guess.


How does me paying a lesser fee for downtime in a company constitute MSC behaviour specifically?

It's discussed in the link I provided. Might have to go back a few pages to find the start of the convo but it's covered in there.

[Dhrucku]

moving threads is broken.

The issue is that if your accountant is an MSC the person paying the bill isn't your accountant it is you - all work done while you were with your accountant would be treated as inside IR35 with appropriate Income Tax and NI payments required for everything you did in that period.

And the MSC legislation is a sledgehammer so if you are caught by it it's very hard to escape.

MSC has been round since day dot right? This looks like an easy win for HMRC hence the push from them. Before this it was just the threat of an investigation into IR35...it's never ending - is any accountant safe? Who's to say they don't go after every accountant if it's an easy win for them?
I'm with an accountant that uses FreeAgent which makes things a little better I guess.


How does me paying a lesser fee for downtime in a company constitute MSC behaviour specifically?

[eek]

How is me asking for a discounted price for accounting services not good for me? Accountant is doing minimal work for me once I transition so what's the whole MSC argument, read it but don't get how this affects me - seems to be HMRC coming down on the accountants...

(mod can move if this is not the right place)

moving threads is broken.

The issue is that if your accountant is an MSC the person paying the bill isn't your accountant it is you - all work done while you were with your accountant would be treated as inside IR35 with appropriate Income Tax and NI payments required for everything you did in that period.

And the MSC legislation is a sledgehammer so if you are caught by it it's very hard to escape.

[Dhrucku]

Of course you should. If there are any changes to your business you should be telling the accountant. They may not be able to do anything about the wages you've already paid to help keep under tax thresholds but if you don't ask them you will never know. Been a very long time since I've used a brolly but I guess they will want a P45 or something. On top of speaking to your accountant you need to pick a brolly and speak to them and they will tell you what you want. If you don't know something then its better to ask the people you pay rather than a bunch of contractors really.

If you'd told your accountant they could have explained this to you which is why you tell your accountant everything that changes. You'll have a mixed LTD and Perm SA for the year they combined but after that you'll have no need to do an SA as it's all done through the brolly. There are guides out there such as
https://www.contracteye.co.uk/do-you...source%20(PAYE).
and also about moving to a brolly specifically such as this one on the Clarity Umbrella website
https://clarityumbrella.co.uk/2020/0...d-to-consider/

A bit of research would have helped you here.


Firstly this isn't necessarily a good thing. Read the thread below. Unfortunately it's huge but there is some discussion in there that reduced fees which could be linked to Managed Service Companies so you need to check carefully
https://forums.contractoruk.com/hmrc...panies-30.html
Also there is a difference between dormant and not trading. There is no 'kind of dormant'. Dormant requires some paperwork to have it officially declared as that.

Please speak to your accountat. You are getting so much wrong in the above you need professional advice.

What makes you want to use Pendragon? Have you done any research? A quick search on here using the google search would have squashed that idea flat.
https://www.google.com/search?q=pend...hrome&ie=UTF-8
You can change the name in that search to find the other.

I think I speak for quite a few others on here but Clarity Umbrella is your best choice by far. Lucy posts a lot on here and knows her beans. Just won award for Best Umbrella under 500 clients this month as well.

It's unlikely you'll get a choice though. Most agents will have a list they'll get kick backs from would rather use. Push hard to use Clarity, if they still say no contact Lucy at Clarity to see if she will have a word with them.

Oh and this is an accounting / umbrella question you could have posted it in either the Accounting section or the Umbrella section. Business isn't the one.

Thanks for the response lad, good to see you still knocking about the place as you provide great advice.

At a point where I've just accepted the contract so will get the ball rolling with talking to the accountant and setting up the umbrella.

Good shout with Clarity I'll go with them as they seem reputable having looked at some reviews and feedback on this site, I didn't realise there were so many umbrellas with such differences. It's just payroll! I'll be requesting P45 (although I think this is available on FreeAgent with my current accountants). I'd like to start taking some dividends out so need to chat to them about the best way to do this now that I'll be going inside as well.

How is me asking for a discounted price for accounting services not good for me? Accountant is doing minimal work for me once I transition so what's the whole MSC argument, read it but don't get how this affects me - seems to be HMRC coming down on the accountants...

(mod can move if this is not the right place)

[eek]

On the plus side I am paying half my accountant fee now since it’s largely just there kind of dormant.

That’s really not a plus given HMRC’s new focus on attacking accountants that specialise in contractors and what is happpening at Churchill knight and Boox. https://forums.contractoruk.com/hmrc...companies.html

profiteering from the work a contractor does (I.e, receiving more money when contractors are working) is one of the core identifies in HMRC’s view.

[northernladuk]

1 - should I be letting my accountant know that I’ll now be working through an umbrella company now for payroll. My current accountant is not on the preferred list of suppliers for umbrellas so things will need to be kept separate

Of course you should. If there are any changes to your business you should be telling the accountant. They may not be able to do anything about the wages you've already paid to help keep under tax thresholds but if you don't ask them you will never know. Been a very long time since I've used a brolly but I guess they will want a P45 or something. On top of speaking to your accountant you need to pick a brolly and speak to them and they will tell you what you want. If you don't know something then its better to ask the people you pay rather than a bunch of contractors really.

2 - how does working through an umbrella affect things like self assessment going forward? Will I have to get an output of monies in / out from the umbrella relating to my payment at some point to share with my accountant for SA going forward as my LTD is doing nothing?

If you'd told your accountant they could have explained this to you which is why you tell your accountant everything that changes. You'll have a mixed LTD and Perm SA for the year they combined but after that you'll have no need to do an SA as it's all done through the brolly. There are guides out there such as
https://www.contracteye.co.uk/do-you...source%20(PAYE).
and also about moving to a brolly specifically such as this one on the Clarity Umbrella website
https://clarityumbrella.co.uk/2020/0...d-to-consider/

A bit of research would have helped you here.

On the plus side I am paying half my accountant fee now since it’s largely just there kind of dormant.

Firstly this isn't necessarily a good thing. Read the thread below. Unfortunately it's huge but there is some discussion in there that reduced fees which could be linked to Managed Service Companies so you need to check carefully
https://forums.contractoruk.com/hmrc...panies-30.html
Also there is a difference between dormant and not trading. There is no 'kind of dormant'. Dormant requires some paperwork to have it officially declared as that.

Anything else I’m missing or should be aware of having moved from outside to a more inside way of getting paid.

Please speak to your accountat. You are getting so much wrong in the above you need professional advice.

Also anyone got any recommendation for umbrellas or are they all the same, I’m thinking of Pendragon so would be keen to hear of any others / experiences.

What makes you want to use Pendragon? Have you done any research? A quick search on here using the google search would have squashed that idea flat.
https://www.google.com/search?q=pend...hrome&ie=UTF-8
You can change the name in that search to find the other.

I think I speak for quite a few others on here but Clarity Umbrella is your best choice by far. Lucy posts a lot on here and knows her beans. Just won award for Best Umbrella under 500 clients this month as well.

It's unlikely you'll get a choice though. Most agents will have a list they'll get kick backs from would rather use. Push hard to use Clarity, if they still say no contact Lucy at Clarity to see if she will have a word with them.

Oh and this is an accounting / umbrella question you could have posted it in either the Accounting section or the Umbrella section. Business isn't the one.

[Dhrucku]

In my area of expertise things have moved into a state where companies are blanketing inside and therefore I’ve had to take an inside role, or risk being out of a role for a while / taking low rates.

1 - should I be letting my accountant know that I’ll now be working through an umbrella company now for payroll. My current accountant is not on the preferred list of suppliers for umbrellas so things will need to be kept separate

2 - how does working through an umbrella affect things like self assessment going forward? Will I have to get an output of monies in / out from the umbrella relating to my payment at some point to share with my accountant for SA going forward as my LTD is doing nothing?

On the plus side I am paying half my accountant fee now since it’s largely just there kind of dormant.

Anything else I’m missing or should be aware of having moved from outside to a more inside way of getting paid.

Also anyone got any recommendation for umbrellas or are they all the same, I’m thinking of Pendragon so would be keen to hear of any others / experiences.