What are the pros and cons of these various options of employment?

[jamesbrown]

Your options (5) and (6) are unicorn fairies. IR35 only applies to arrangements that involve intermediaries, not direct employment via an umbrella employer or a traditional employer.

[northernladuk]

Well, bless him, he might have the skills! ...Timing and history aside.

The evidence we have so far isn't backing that up

[simes]

But as has already been said, this is possibly the worst time possible to try and find work as a new contractor; you won't have the skills or the history.

Well, bless him, he might have the skills! ...Timing and history aside.

[BritishLad88]

I am trying to understand the contracting concept. In my limited understanding, these are the options available to work as IT consultant.

I was trying to look for the pros and cons of each of these and not able to get a clear details. I am trying to join back to work after a career break and give a best shot at whatever works for me.

Thanks for any help and your valuable time.

As a… Work as In or Out of Ir 35 1. Permanent Employee Direct employee 2. Permanent Employee An employee of an umbrella company 3. Contractor within IR 35 4. Contractor outside IR 35 5. Contractor by joining an umbrella company inside IR 35 6. Contractor by joining an umbrella company Outside of IR 35

In general, option 4 is the more financially advantaged option and one that most contractors go for I feel.

However, i'm sure you know the new IR35 rules have pretty much make this option less & less likely in the future. Not saying this option going to die but will be far less of these than previously.

If you're asking this as a taster to thinking of starting contracting then you arrive at the wrong time afraid.

[eek]

As a… Work as In or Out of Ir 35 1. Permanent Employee Direct employee 2. Permanent Employee An employee of an umbrella company 3. Contractor within IR 35 4. Contractor outside IR 35 5. Contractor by joining an umbrella company inside IR 35 6. Contractor by joining an umbrella company Outside of IR 35

Thanks for the answer. This is what I was looking for. I have some more doubts here.

There are many job postings mentioning 'outside IR 35'.

If one takes that offer, at a later date, could they still be declared as not actually outside of IR 35 by HMRC and be fined and taxed?

To be on the safer side, can we take an offer that is outside IR 35 but pay taxes as if we are within IR 35 ?
Thanks you for your help and time.

How have you been on this site for 5 years yet don't understand the basics of IR35?

[stit]

2 & 5 are surely the same thing.
6 doesn't exist.

I'd suggest the real options are your 1, 3, 4 & 5. Going forwards if you opt for Ltd Co, it'll be the client who decides if it's 3 or 4.

As a… Work as In or Out of Ir 35 1. Permanent Employee Direct employee 2. Permanent Employee An employee of an umbrella company 3. Contractor within IR 35 4. Contractor outside IR 35 5. Contractor by joining an umbrella company inside IR 35 6. Contractor by joining an umbrella company Outside of IR 35

Thanks for the answer. This is what I was looking for. I have some more doubts here.

There are many job postings mentioning 'outside IR 35'.

If one takes that offer, at a later date, could they still be declared as not actually outside of IR 35 by HMRC and be fined and taxed?

To be on the safer side, can we take an offer that is outside IR 35 but pay taxes as if we are within IR 35 ?
Thanks you for your help and time.

[northernladuk]

Might be better spending some time looking at the state of the market before second guess how you will be remunerated.

But either way, you need to a lot more reading up first. None of this is new and pages and pages of guides out there.

[Maslins]

2 & 5 are surely the same thing.
6 doesn't exist.

I'd suggest the real options are your 1, 3, 4 & 5. Going forwards if you opt for Ltd Co, it'll be the client who decides if it's 3 or 4.

[malvolio]

Much more reading needed, I fear. for one thing, if you "join an umbrella" you are legally an employee of the umbrella. IR35 is not a consideration. IPSE's Guide to Freelancing would be a good start.

But as has already been said, this is possibly the worst time possible to try and find work as a new contractor; you won't have the skills or the history. Look for permanent work for a year or three.

[wattaj]

I am trying to understand the contracting concept....

I don't know your skills/area, but here's my take on the general market in 2020: contracting for newbies is pretty much dead for the foreseeable future. Find a permanent role and keep your head down.

Good luck.

[stit]

I am trying to understand the contracting concept. In my limited understanding, these are the options available to work as IT consultant.

I was trying to look for the pros and cons of each of these and not able to get a clear details. I am trying to join back to work after a career break and give a best shot at whatever works for me.

Thanks for any help and your valuable time.

As a… Work as In or Out of Ir 35 1. Permanent Employee Direct employee 2. Permanent Employee An employee of an umbrella company 3. Contractor within IR 35 4. Contractor outside IR 35 5. Contractor by joining an umbrella company inside IR 35 6. Contractor by joining an umbrella company Outside of IR 35