Advice on choosing Umbrella or PAYE for my contract? Details inside.

[simes]

Many thanks sir. Appreciated.

[lucyclarityumbrella]

A blanket ban is legal, ruling everyone inside is not.

Assuming the blanket ban pushes the contractor through an umbrella, it places it outside of scope of IR35, and therefore there is no legal obligation to increase the rate either ie the employment costs can get pushed down the chain, rather than being absorbed by the client or in the simplest case an uplift in the rate to cover it.

[drob1984]

Easier said than done if the market is dead, the warchest hasn't been maintained or is running low and it's the only gig you've got on the table.

Understand where you are, this will be the second time in twelve months where this has now happened to me. But its the nature of being a contractor/freelancer, you could be culled at any moment and so have to be ready to jump on the next thing. Like you, I am worried how long I may be out of work, but I'd rather take something in screwfix or B&Q to tide me over than risk the "outside > inside" switch and the repercussions that could bring.

[michaelC]

risk the "outside > inside" switch and the repercussions that could bring.

have a look at this:

https://www.gov.uk/government/public...ing-rules-ir35

"HMRC will focus on ensuring compliance with the new rules, rather than investigating past arrangements

HMRC will not open a new compliance enquiry into a contractor’s return for tax years before 6 April 2021 in circumstances where:

• a client decides that a contract is within the off-payroll working rules (IR35)"

so the switch is not going to cause a risk for previous tax years.

[eek]

You may believe what HMRC say others take a very different viewpoint (often after a very expensive lesson).

[LondonManc]

have a look at this:

https://www.gov.uk/government/public...ing-rules-ir35

"HMRC will focus on ensuring compliance with the new rules, rather than investigating past arrangements

HMRC will not open a new compliance enquiry into a contractor’s return for tax years before 6 April 2021 in circumstances where:

• a client decides that a contract is within the off-payroll working rules (IR35)"

so the switch is not going to cause a risk for previous tax years.

Is that like when they've previously said okay to schemes then come for contractors a few years later when they realised there would be blood in the water?

[eek]

Is that like when they've previously said okay to schemes then come for contractors a few years later when they realised there would be blood in the water?

I don't remember HMRC saying schemes were fine - they merely kept quiet while the promoters lied that HMRC HAD approved them via issuing DOTAS numbers

[lucyclarityumbrella]

This is down to the tax avoidance was not illegal, tax evasion was - then HRMC changed their mind