New role option of contracting given: Advice needed

[spikedjack]

Hi All,

Hoping the guru's of contracting/IR35 can assist here...

I've recently accepted a new position on a senior leadership team for a small, but developed business looking to expand internationally.
The company is Polish and owned by a Polish parent group (public) on the Warsaw stock exchange.

I'm currently employed, but this offer means i will be the only UK based team member and therefore have been proposed two options:

1) Employee: They pay me gross, i manage my own tax/NI affairs in the UK due to no UK legal entity. I would still be paid in GBP.
2) B2B contracting: They contract me through a UK registered Ltd company that i would need to set up. I would still be paid in GBP.

The role, whilst appearing permanent, is a specifically detailed project, scheduled to end 30Sep2023. There are key success measures along the way, but ultimately there is a salary associated aside from milestone payments. The Company in question is happy to pay either salary, or day rate, equating the same value (plus milestones) as i will be managing all tax affairs personally.

My current firm may wish to keep me under confidentiality agreement and consult on a very light level to see out some existing issues on projects, but this is up in the air at present and may not come to fruition.

This all in mind, I would be keen for the obvious efficiencies that could be gained from the B2B approach, especially due to the additional admin required on my end. The question is, could one argue that this is worthless due to being inside IR35 as of next year?

Any advice is appreciated, all roles to this date have been perm/employed.

Best,

[drdel]

I think to be considered an employee of your own limited company HMRC will expect your company to have more than one client and it must be possible for a substitution of personnel to be permitted by the 'customer'.

If your are paid monthly without submitting invoices and aren't VAT registered I think HMRC would consider you 'employed' and iR35 would be relevant.

If you form a LTD company your accounts will need to be audited every year by a qualified accountant - they will best advise you on the IR35 liability.

Note you will be responsible for any pension you wish to accrue.

Edited by drdel on Monday 9th December 16:26

[YouWhat]

drdel said:

I think to be considered an employee of your own limited company HMRC will expect your company to have more than one client and it must be possible for a substitution of personnel to be permitted by the 'customer'.

If your are paid monthly without submitting invoices and aren't VAT registered I think HMRC would consider you 'employed' and iR35 would be relevant.

If you form a LTD company your accounts will need to be audited every year by a qualified accountant - they will best advise you on the IR35 liability.

Note you will be responsible for any pension you wish to accrue.

Edited by drdel on Monday 9th December 16:26

I would imagine IR35 doesn't come into it if you contract through a limited company with a business outside of the UK.

[theboss]

YouWhat said:

I would imagine IR35 doesn't come into it if you contract through a limited company with a business outside of the UK.

In believe IR35 still applies, but status determination remains with the Ltd Co / contractor - the offshore client can’t be caught by the impending new rules.

Am looking into something similar myself, and also starting a short new contract in Belgium next week in-between other engagements. I’m likely to seek future contracts outside the UK as much as possible.

[Eric Mc]

The new rules don't change the basis of IR35, only who is responsible for deciding whether it applies or not.

[J1JPE]

Ltd Co. = higher net take home, after expenses, dividends with a good accountant like Contratax in Lytham; but more stress, hassle, personal responsibilities, terms of employment need to cover sickness pay etc, liability insurance may be required, IR35 tax risks if only working for one 'client'

Salaried = employment contract needs to be robust, need advice on employer tax is liability in the country where the work is done, not sure they can claim no employer liability (NI, Pension etc) because they don't have a UK entity

For a long term contract, if you plan to consult for another client as well, Ltd certainly works financially