Unbrella or bust

[Herby]

Hi Guys, Apologies for Hijacking the thread.

I am i a similar position to Damo, earn roughly the same (slightly less) and work in finance.

If i do not work i do not get paid, is this sufficient to be outside of IR35??

I would like to set up my own LTD company and manage it myself. Does anyone else do this and what advice can you kindly give.

Thanks

[malvolio]

Your choice. On average support rates you're looking to throw away around £10k a year net income for no reason at all - if you think £150 is a lot, I'm surprised you can afford to do that.

And I don't break any laws either.

[damo111176]

Note if the IR investigate it's not just the contarct that getsa looked into, its your actual job in relation to it....we've had two at ouir place in the last few years and they looked at the individual's job not just their contract so the simple fact that their contract was IR friendly meant nothing as it happened I think they were both ok.

I may well look into getting my contract looked at but £150 is a hell of a lot...and its the afct that you have to keep paprerwork for 6 years so anytime in that period they can investigate.

I appreciate a lot of poeple just think money money money no matter of the risk but when it involves the law I'm gonna try and stay the right side.

[ASB]

I work as an offshoot of a helpdesk which says to me inside IR35 all the way.

You may of course be right. But a help desk doesn't have to be inside. So the question is, are you prepared to risk the cost of getting trhe contract reviewed and possibly changed negotiated against an improvement in your taxation positions.

It's entirely your choice. Only you can decide if it is worth it to you.

[malvolio]

I work as an offshoot of a helpdesk which says to me inside IR35 all the way.

No it doesn't...

Well to be precise it may do, but it is not guaranteed. For example,

• having to do set hours might appear to be D&C, but given the nature of the work it is not unreasonable and would apply to contractors as much as employees. Similarly having to adhere to performance standards and SLAs. Support work requires that kind of control anyway so is not a pointer to employment in that arena
• If you don't turn up, do you get paid? If you turn up and there is nothing for you to do, do you get paid?
• Are you contractually allowed to send a substitute, perhaps with the client's approval?

Pass any one of those and you are not inside IR35...

[Damo1176]

Send your contract to Bauer and Cottrell, they will check it for you for £150 ( last time I looked ). They are ex-HMRC and know their stuff. Their official response plus PCG+ insurance will sort you out.

IR35 is currently 4 wins and approx 2000 loses ( Malvolio has been keeping count I think ) in court for HMRC atm. The wins were all several years ago and had extenuating circumstances.

I work as an offshoot of a helpdesk which says to me inside IR35 all the way.

[DaveB]

If anyone knows a cheap legal way of having a contarct checked for IR35 with an insured back up response that will cover me if the IR come calling please let me know, I love security but at the cost of £600 a month I'm not so sure!! In a way now I hope they do get really picky and pull out all the people who have merrily setup limited companies deeming themselves outside ir35 but thats just my jealous streak coming out. :-)

Send your contract to Bauer and Cottrell, they will check it for you for £150 ( last time I looked ). They are ex-HMRC and know their stuff. Their official response plus PCG+ insurance will sort you out.

IR35 is currently 4 wins and approx 2000 loses ( Malvolio has been keeping count I think ) in court for HMRC atm. The wins were all several years ago and had extenuating circumstances.

[malvolio]

In a way now I hope they do get really picky and pull out all the people who have merrily setup limited companies deeming themselves outside ir35 but thats just my jealous streak coming out. :-)

Nope, it's just your lack of understanding of how it all works...

[damo111176]

I have just read this: http://www.itcontractor.com/Articles...86&photopage=0

And this to me says that Giant Trailblazer and some of the all in accountant packages may offer are infact right on the wire regarding managed limited companies and would surely be the first to be scrutinised although how they'd know just looking at a company I don't know. The control you have is to take their advice on pay and withdraw money from the business account. Surely though control is with the accountants or Giant but the liability sits with you the worker.

I have decided in the end to go with Orange Genie (umbrella) I will earn some £600 a less a month compared to a limited company but with the new legilsation and strengthened scrutinty I personally don't like the risk. As an IT contractor I believe unless you supply a very specialist skill over short term (3 monthly contracts) at multiple locations I feel that umbrella is the best and safest bet.....have I convinced myself erm not sure!!!

You can claim many expenses but as said in many other notes dispensations just cover the umbrella not having to supply receipts for subsistence under the P11D, if you were to claim £20 a day for that over 3 months and then the IR knocked and said have you got receipts you'd be liable not the umbrella company. I find this is hassle to provide receipts for all food but seeing as I bring in a lot of my own stuff from home it's no biggie, I just want to be able to claim travel to and from work which I can continue to do with receipts anyway.

If anyone knows a cheap legal way of having a contarct checked for IR35 with an insured back up response that will cover me if the IR come calling please let me know, I love security but at the cost of £600 a month I'm not so sure!! In a way now I hope they do get really picky and pull out all the people who have merrily setup limited companies deeming themselves outside ir35 but thats just my jealous streak coming out. :-)

[Bluebird]

good point Jh, a lot of brollies claim 'dispensations', but this doesn't mean you can claim for expenses that don't exist - only that you don't have to keep reciepts for them.

Overall, this may reduce the workload involved but doesn't increase your ability to earn more unless you commit fraud.

[jh0711]

one other thing to be aware of with brollies is that when you call them they may offer you some sort of expected return via a calculator - just be very aware of exactly what they are calculating as some will pre load high levels of expenses to make it look like a more attractive proposition.

the main difference between each brolly is what they charge and what expenses you can claim - however the rules around expenses are pretty strict so it does really just come down to what actual fee you pay.

obviously things like service and ease of use also need to be taken into account but that is a personal thing depending on your preference.

[Bluebird]

I think if you go down the brolly route the idea is to maximise expenses - make sure you go to a decent brolly and check what they tell you that you can claim for.

[damo111176]

It's not so much the permie thing In was worried about, more the fact that I am convinced my contract would be deemed inside IR35 and I don't like nasty surprises. I can gurantee there are millions out there that are deeming themselves inside IR35 when they're not. Chances are they won't get cvaught either. I know of at least 3 people that work on the IT helpdesk next to me that have been told by their accountant that their contract has enough ticks in the boxes to suggest they are outside IR35.....what when they have no control over the hours they do, work and processes is all dictated to them etc etc need I go on. Maybe I am being chicken but I would worry all year round that while I ran my limited company I might just get caught and end up with a hefty tax bill and uit would not end in that year, you have to keep paperwork for 3-6 years too and all the paperwork you have to do.

I don't like the lack of money you get through an umbrella but compared to a limited company inside IR35 I lose a mere 2% and I don't lose any sleep.

Here is to mediocre wages while I get stressed over all the peope that will get away with running their limited companies and making loadsa money.

[Denny]

I read through my contract and think inside IR35 without much of a doubt. I work in the same premises everyday, have to cover pretty much cetain hours although some days I work extra and others I work less to claim back the time. I do an IT reporting role as on offshoot of the IT helpdesk, on a 3 monthly rolling contract with the likeliness of the contarct beiung extended to November then ending, then the options available are premie role, or leave and find something else and to be honest I'd prefer a permie role (I like security). Bearing that in mind would anyone agree that brolly is the best option?

Bearing in mind PLANIT charge 2% of your pay as their fee. I earn approx £750 a week.

Answers on a postcard please?

I would suggest a good brolly as you don't appear to make enough to make a limited a worthwhile option to benefit from CT at 20 per cent (2007) -v- 40 per cent tax on deemed salary. Plus you are planning to go permie, so what's the point in the added hassle of starting your own limited.

Brollies are tailor made for people like you.

[damo111176]

I read through my contract and think inside IR35 without much of a doubt. I work in the same premises everyday, have to cover pretty much cetain hours although some days I work extra and others I work less to claim back the time. I do an IT reporting role as on offshoot of the IT helpdesk, on a 3 monthly rolling contract with the likeliness of the contarct beiung extended to November then ending, then the options available are premie role, or leave and find something else and to be honest I'd prefer a permie role (I like security). Bearing that in mind would anyone agree that brolly is the best option?

Bearing in mind PLANIT charge 2% of your pay as their fee. I earn approx £750 a week.

Answers on a postcard please?