Hope you excuse maybe naive question(s).
Let me give you the background.
Worked in large company for 35+ years PAYE but was lucky enough to be able to leave early with a pay-off in last tax year. I've had contractors work for me but never contracted so I guess never took so much notice of that side, although was aware of IR35 from an employer perspective and saw how it effected some of our contractors.
With the help of IFA have organised pensions, investments so I'm going to be drawing down from pension up to my PA & using money from investments, savings etc so in theory I'm not going to have to pay any tax. This is only just getting going so in actual fact will probably be under PA this year.
An ex-colleague has approached me to ask if I want to do some work for him. This is not the same company I worked for to be clear. He has some specific tasks he wants help on that he doesn't have resource to do, and when they're complete that should be it. I can do it remotely and at my own pace as it were.
I'm not doing it for the money per se (but of course current climate not going to lie is handy)but something to keep me occupied more so however who knows as my investments and pensions fall where this may lead.
So I'm looking for some wisdom / advice as to the different options.
He has said I can go onto the company payroll as a zero hours contract. This sounds easiest for me, but perhaps less tax efficient and not setting me up for future if I want to work / contract elsewhere.
Presumably I can use what I see referred to on here as an Umbrella Company. I'm understanding that to be registering with some kind of employment agency and they handle tax & NI etc. Again presumably relatively easy for me. However I'm thinking if this was the only piece of work I was to do might as well go on the payroll as do this, and only works to my advantage if I choose to go contracting elsewhere.
Then finally I presume I can set up myself as a company. Would sound like the best way I can minimise tax exposure. If I decide I want to pursue this more then I could also quote his contract as well as my work experience to tout for more work. But it's also the most scarey option, with having to create invoices and whatever else is required (here I imagine could be different depending on size, so if anyone can help with the best links on this site would be appreciated). And of course I couldn't assume future contracting would be outside IR35.
I think I've though of everything but if there's other things I should be considering please add. And I know there might be two answers depending whether I just do this one job or continue, my feeling as I will do more as I've got 8 years before remaining pensions kick in and think I have something to offer without overdoing it.
Let me give you the background.
Worked in large company for 35+ years PAYE but was lucky enough to be able to leave early with a pay-off in last tax year. I've had contractors work for me but never contracted so I guess never took so much notice of that side, although was aware of IR35 from an employer perspective and saw how it effected some of our contractors.
With the help of IFA have organised pensions, investments so I'm going to be drawing down from pension up to my PA & using money from investments, savings etc so in theory I'm not going to have to pay any tax. This is only just getting going so in actual fact will probably be under PA this year.
An ex-colleague has approached me to ask if I want to do some work for him. This is not the same company I worked for to be clear. He has some specific tasks he wants help on that he doesn't have resource to do, and when they're complete that should be it. I can do it remotely and at my own pace as it were.
I'm not doing it for the money per se (but of course current climate not going to lie is handy)but something to keep me occupied more so however who knows as my investments and pensions fall where this may lead.
So I'm looking for some wisdom / advice as to the different options.
He has said I can go onto the company payroll as a zero hours contract. This sounds easiest for me, but perhaps less tax efficient and not setting me up for future if I want to work / contract elsewhere.
Presumably I can use what I see referred to on here as an Umbrella Company. I'm understanding that to be registering with some kind of employment agency and they handle tax & NI etc. Again presumably relatively easy for me. However I'm thinking if this was the only piece of work I was to do might as well go on the payroll as do this, and only works to my advantage if I choose to go contracting elsewhere.
Then finally I presume I can set up myself as a company. Would sound like the best way I can minimise tax exposure. If I decide I want to pursue this more then I could also quote his contract as well as my work experience to tout for more work. But it's also the most scarey option, with having to create invoices and whatever else is required (here I imagine could be different depending on size, so if anyone can help with the best links on this site would be appreciated). And of course I couldn't assume future contracting would be outside IR35.
I think I've though of everything but if there's other things I should be considering please add. And I know there might be two answers depending whether I just do this one job or continue, my feeling as I will do more as I've got 8 years before remaining pensions kick in and think I have something to offer without overdoing it.
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