Reply to: Changing from Umbrella to Limited!

[TheFaQQer]

This is the big assumption though. Those that know and vaguely understand IR35 will put the effort in to make their working conditions fit the contract/IR35 requirements. A vast majority won't and put themselves firmly inside IR35 via working practices and will get worse as contracting becomes the defacto standard model for clients to resource projects rather than perms.

I agree.

(oh de facto )

[northernladuk]

Disagree completely. There are a large number of posts advising people that they need to make sure they know what IR35 is and how best to arrange their working practices so that they are not deemed to be employees. For those who appear to be IR35 caught (eg. they get paid when there is no work, are closely supervised and directed, they have no right of substitution - kind of like the OP really), there is advice that they appear to be caught.

I don't count pragmatism as scaremongering, to be honest.

Agreed.

Most people on CUK would NOT be deemed disguised employees based on their contracts - these days there are very few standard agency contracts which would indicate employment rather than contractor. However, some people on CUK may be deemed disguised employees based on their working conditions.

I can't remember the last time an agency or client showed me a contract which would be an IR35 fail, assuming that the contract reflects the working conditions. I can certainly think of people I know where the working conditions are a much stronger indication of employment than the paperwork suggests.

If you haven't learned that much about IR35, then I suggest that you need more "scaremongering".

This is the big assumption though. Those that know and vaguely understand IR35 will put the effort in to make their working conditions fit the contract/IR35 requirements. A vast majority won't and put themselves firmly inside IR35 via working practices and will get worse as contracting becomes the defacto standard model for clients to resource projects rather than perms.

[TheFaQQer]

There is so much scaremongering on here regarding IR35.

Disagree completely. There are a large number of posts advising people that they need to make sure they know what IR35 is and how best to arrange their working practices so that they are not deemed to be employees. For those who appear to be IR35 caught (eg. they get paid when there is no work, are closely supervised and directed, they have no right of substitution - kind of like the OP really), there is advice that they appear to be caught.

I don't count pragmatism as scaremongering, to be honest.

I'm sure if you sat down and looked at everyone's contracts most people would be deemed "disguised employees".

Absolutely not.

Most people on CUK would NOT be deemed disguised employees based on their contracts - these days there are very few standard agency contracts which would indicate employment rather than contractor. However, some people on CUK may be deemed disguised employees based on their working conditions.

I can't remember the last time an agency or client showed me a contract which would be an IR35 fail, assuming that the contract reflects the working conditions. I can certainly think of people I know where the working conditions are a much stronger indication of employment than the paperwork suggests.

If you haven't learned that much about IR35, then I suggest that you need more "scaremongering".

[LisaContractorUmbrella]

There is so much scaremongering on here regarding IR35.

I'm sure if you sat down and looked at everyone's contracts most people would be deemed "disguised employees".

Then it's not really scaremongering is it?

[ensignia]

There is so much scaremongering on here regarding IR35.

I'm sure if you sat down and looked at everyone's contracts most people would be deemed "disguised employees".

[LisaContractorUmbrella]

Hi Lisa,

I am not aware of my IR35 position, I will email the agency and ask. There are others doing the same job on a permanent job but in different areas of the country. I have a line manager yes, No I couldn't supply a substitute its me alone. I get emailed jobs for the following day so yes.. I will have a god look around thank you thanks for all your advice

From what you have said I would think it highly unlikely that you were outside IR35. As Wanderer has said, research the subject - getting it wrong in the beginning could mean lots of unwarranted attention from HMR&C at a later date

[Vdubster187]

NO, NO, NO!!!

Read up on IR35. Find out what the conditions are and determine whether you think you are caught or not - it's you and your tax position that you need to know. The agent doesn't know, or even care, how you work.

It's about the working conditions - so make sure you know what to look for, and then make an assessment.



When you say you couldn't supply a substitute, does that mean "the client won't allow me to send a substitute" or "I only have me working for my business so there is no substitute I could send"? There's a BIG difference between the two!!

Does the client tell you how to do the work (ie. exercise direction and control)? Is the client obliged to offer you work, and do you have to accept it? Does the client pay you if there is no work to do?

Read the first timers guides. Read up on IR35.

Since you don't know what IR35 is, then the answer to the question of whether you should ditch the umbrella and run your own business is ABSOLUTELY NOT.

Ok I'll hold back on the email, thanks for the heads up

When you say you couldn't supply a substitute, does that mean "the client won't allow me to send a substitute" or "I only have me working for my business so there is no substitute I could send"?  There's a BIG difference between the two!!

Its only me working for my business so far, I have people who would help out if need be.

Does the client tell you how to do the work (ie. exercise direction and control)?  Is the client obliged to offer you work, and do you have to accept it?  Does the client pay you if there is no work to do?

Yes I have set procedures I have to follow, I have to accept as I am contracted for the month and if there is no work I still get paid.

Thanks again

[TheFaQQer]

I am not aware of my IR35 position, I will email the agency and ask.

NO, NO, NO!!!

Read up on IR35. Find out what the conditions are and determine whether you think you are caught or not - it's you and your tax position that you need to know. The agent doesn't know, or even care, how you work.

It's about the working conditions - so make sure you know what to look for, and then make an assessment.

There are others doing the same job on a permanent job but in different areas of the country. I have a line manager yes, No I couldn't supply a substitute its me alone. I get emailed jobs for the following day so yes.

When you say you couldn't supply a substitute, does that mean "the client won't allow me to send a substitute" or "I only have me working for my business so there is no substitute I could send"? There's a BIG difference between the two!!

Does the client tell you how to do the work (ie. exercise direction and control)? Is the client obliged to offer you work, and do you have to accept it? Does the client pay you if there is no work to do?

Read the first timers guides. Read up on IR35.

Since you don't know what IR35 is, then the answer to the question of whether you should ditch the umbrella and run your own business is ABSOLUTELY NOT.

[Vdubster187]

Have a read of the First Timers guide, the link is on the right though it probably won't directly answer your question it has a lot of useful information in it.

If you are getting a small business up and running alongside your contracting work then I'd suggest that you want to be incorporated as a LTD company rather than umbrella and self employed for the repair business.

Having a company would allow you to invest your contracting income into growing your repair business. It's also more tax efficient if you are outside IR35 - you do know what IR35 is don't you.
T
Have a chat to one of the recommended accountants and see what they say.

Hi wanderer,

Thanks you I will take a look at the link.

Again great advice, what I would do without the great help from people on here.

Thanks again

[Vdubster187]

Do you know what your IR35 position is? Are there others working with you doing the same job as permanent employees? Do you report to a line manager? Could you provide a substitute if you could n't work? Are you told what work you will be doing each day? etc etc. There's loads of information about it on the forum - if you are outside then find yourself a good specialist accountant and try running your own Ltd Company - if you are inside there won't be a great deal of financial benefit.

Hi Lisa,

I am not aware of my IR35 position, I will email the agency and ask. There are others doing the same job on a permanent job but in different areas of the country. I have a line manager yes, No I couldn't supply a substitute its me alone. I get emailed jobs for the following day so yes.. I will have a god look around thank you thanks for all your advice

[Vdubster187]

Is it worth it? Depends on IR35. If likely to be outside, yes, if caught, probably not.

Register as self employed for computer repairs? Probably not, as you can run them through your company. At law you are then not self employed, but a employed as a director of a company. Only issue likely to be vat, if co is vat reg and your repair customers are retail - the vat makes you more expensive or cuts your profit if you absorb it.

A small point, don't refer to paying your "wages" into your company - makes me squirm

Thank you Jessica, great advice

[TheFaQQer]

On this kind of contract would you advise this?

Probably, but it depends on your income as well. Are you going to be over the VATtable threshold? If so, then being on FRS (if this makes sense) can make a bit of money for you. How will accountancy fees compare to the cost of the umbrella? If it's not close, then no.

The LTD company is set and I would also like to offer a computer repair service under this name as well as putting my monthly contract wages though this, is this possible?

Yes

If I am offering a computer repair service as well as my contract, would I need to register as self employed?

No - you aren't self-employed. You are employed by a limited company, where you own 100% (or whatever) of the shares.

Is it worth just hiring an accountant and doing away with the umbrella company?

Depends on the sums - see above.

[Wanderer]

The LTD company is set and I would also like to offer a computer repair service under this name as well as putting my monthly contract wages though this, is this possible?

If I am offering a computer repair service as well as my contract, would I need to register as self employed?

Is it worth just hiring an accountant and doing away with the umbrella company?

Have a read of the First Timers guide, the link is on the right though it probably won't directly answer your question it has a lot of useful information in it.

If you are getting a small business up and running alongside your contracting work then I'd suggest that you want to be incorporated as a LTD company rather than umbrella and self employed for the repair business.

Having a company would allow you to invest your contracting income into growing your repair business. It's also more tax efficient if you are outside IR35 - you do know what IR35 is don't you.

Have a chat to one of the recommended accountants and see what they say.

[LisaContractorUmbrella]

Do you know what your IR35 position is? Are there others working with you doing the same job as permanent employees? Do you report to a line manager? Could you provide a substitute if you could n't work? Are you told what work you will be doing each day? etc etc. There's loads of information about it on the forum - if you are outside then find yourself a good specialist accountant and try running your own Ltd Company - if you are inside there won't be a great deal of financial benefit.

[Jessica@WhiteFieldTax]

Is it worth it? Depends on IR35. If likely to be outside, yes, if caught, probably not.

Register as self employed for computer repairs? Probably not, as you can run them through your company. At law you are then not self employed, but a employed as a director of a company. Only issue likely to be vat, if co is vat reg and your repair customers are retail - the vat makes you more expensive or cuts your profit if you absorb it.

A small point, don't refer to paying your "wages" into your company - makes me squirm