Question about Consultant Status

[Redgate]

My wife has recently resigned from work but when she went in to sign all the documents and say goodbye to her friends and colleagues, they made her an offer she could not refuse.

Basically they offered to keep her services as a consultant. The details are very sketchy at the moment but she would have the right to accept or refuse assignments and would be working from home all the time with no travelling involved.

If this materializes, this is pure manna for us as we could do with the extra income and flexible hours.

Would you know where to look for information about the consultant status? For instance I am interested in how to handle tax declaration and how (if needed) to declare the change in status to the appropriate authorities.

Basically I would like to do everything by the book so as to not get bitten in the backside further down the line and to avoid as many pitfalls as possible. The aim is to make a little bit of extra pocket money and not to turn this into a full-time job (again).

Thanks for your help.

[randlemarcus]

The main aim will be to avoid coming under IR35, and most of the learning will flow from there. Start with a few google searches on that subject, and how to avoid it, and you'll gather in the essential elements.

[Eric Mc]

And if IR35 was properly policed, she would undoubtedly fall foul of it.

NOTE - IR35 only applies if she operates through her own limited company or a partnership.

If she is hired on a pure "self employed" basis, all the tax and NI risks will fall on her former employer.

[Redgate]

Thanks for your help guys. I realize we have a lot of reading and catching up to do.

Eric Mc

If I understand correctly, if her former employer enters a contract with her to define her workload and somehow cap the total amount she could invoice during a period of time, and provided she performs the task as a self-employed, than the burden to declare is on the ex-employer ?

Also, I heard somewhere that as long as she was not earning above a certain threshold (whose value I do not know) she did not have to declare anything to HRMC.

Do you guys know if this is correct?