IR35 Position, Confused
Discussion
As of 16th Dec I'm going to be starting work for Bloodhound SSC. They don't have any employees, they only 'employ' contractors.
I'm considering a few options, amongst them are going Ltd company, one inside IR35, one outside IR35.
I'd take home IRO 10% more if I worked outside IR35, but I worry about if I'd get investigated for it.
Bloodhound provide office space, PC, software etc, but do not pay holiday, sickness, pension etc, as I said, the only way to work for them is "self employed". What is the likelyhood of an IR35 investigation?
I'm considering a few options, amongst them are going Ltd company, one inside IR35, one outside IR35.
I'd take home IRO 10% more if I worked outside IR35, but I worry about if I'd get investigated for it.
Bloodhound provide office space, PC, software etc, but do not pay holiday, sickness, pension etc, as I said, the only way to work for them is "self employed". What is the likelyhood of an IR35 investigation?
For IR35 the relevant questions surround Control, Substitution and Mutual obligation. The fact that they provide an office, pc and software is relevant though not critical.
Will you report formally your tasks to a manager who then monitors your performance?
Do you have the right to substitute yourself with another similarly skilled candidate?
Do you expect to be paid when there is no work, or are you expected to take work given to you?
These are the types of questions which establish whether you are truly in business or a disguised employee.
As for liklihood of an investaigation. Who knows, seemingly it can be random.
Will you report formally your tasks to a manager who then monitors your performance?
Do you have the right to substitute yourself with another similarly skilled candidate?
Do you expect to be paid when there is no work, or are you expected to take work given to you?
These are the types of questions which establish whether you are truly in business or a disguised employee.
As for liklihood of an investaigation. Who knows, seemingly it can be random.
I'll try to be a bit more helpful then 
If you're that worried, do you have the option to go through a brolly in which case IR35 becomes a moot point? If you go through your own Limited then you can work as if you are caught by IR35 and pay taxes appropriately, or you can work as if you aren't caught (and by that I mean do contracting properly). If you go down that route you should (a) ensure the contract is IR35 friendly (get it reviewed by the likes of Bauer & Cottrell) (b) ensure your working practices are IR35 friendly and (c) get some investigation insurance.
In terms of likelihood of investigation? You're more likely to win the lottery than receive an IR35 investigation. There have been 322 in the last 5 years (HMRC's own figures, released under FOI in the last couple of months). What triggers an investigation is kind of outlined here
If you're that worried, do you have the option to go through a brolly in which case IR35 becomes a moot point? If you go through your own Limited then you can work as if you are caught by IR35 and pay taxes appropriately, or you can work as if you aren't caught (and by that I mean do contracting properly). If you go down that route you should (a) ensure the contract is IR35 friendly (get it reviewed by the likes of Bauer & Cottrell) (b) ensure your working practices are IR35 friendly and (c) get some investigation insurance.
In terms of likelihood of investigation? You're more likely to win the lottery than receive an IR35 investigation. There have been 322 in the last 5 years (HMRC's own figures, released under FOI in the last couple of months). What triggers an investigation is kind of outlined here
worsy said:
Do you have the right to substitute yourself with another similarly skilled candidate?
I worked for 6 years as a contracter on aircraft using a Ltd company. Because I couldnt substitute myself with another candidate, if I was sick for example, then I came outside of IR35. Get a decent accountant who knows about contracting and IR35, keep all your receipts and you will be fine. Its slightly daunting at first but once you get the hang of it you will be quids in. Add the misses as your secretary and treat her to a decent AGM once a year 
Out of the 1000s of guys I have worked with who have used Ltd I know one person who was investigated. If really in doubt use a Umbrella company as mentioned by someone else. I used Danbro when I first started Connying, helpful bunch and the timesheet/expenses system is very user friendly.
Edited by robmlufc on Friday 2nd December 09:23
Edited by robmlufc on Friday 2nd December 09:23
R500POP said:
Eric Mc said:
The contract is not enough.
I'm hoping that along with PCG membership that I'll be OK.The clauses in the contract MUST be adhered to in the way the work is actually carried out on a day to day basis.
And the clauses have to be practical. If you have a "substitution" clause in place, the clause MUST be capable of being utilised. Merely having it in the contract is not enough.
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