Recommend an accountant or someone who can advise me on IR35
Discussion
I've worked in IT for most of my career since leaving university in 1995. Mostly as an employee, but for a spell between 2005 and 2011 as a freelancer and worked on two IT contracts abroad lasting a year and 18 months respectively, for a major Scandinavian telco and a large German airline. For both of those I had my own UK-based limited company through which I invoiced, and I paid myself in dividends. In 2011 I was hired as an employee by a well known but not household name American software company, where I was able to build a specialism.
In summer 2019 I was made redundant due to team expansion in India, and I had plans to move out of the world of IT and start a fashion business. I went to the London College of Fashion, part of the University of the Arts, London to learn what I could about the specific business I was interested in. I was in the process of meeting potential suppliers in Paris & Milan in Feb/March 2020 when the Coronavirus hit Europe, and I had to put my future business plans on hold.
Since August last year, I've been freelancing for a managed services provider, working on a few projects, working on average 2-3 days a week and invoicing directly. I was only put in touch with them by an ex-colleague and was originally under the impression it would be an afternoon's work helping with my specialist subject.
I have now been offered a full-time IT contract working directly in my specialism. During the interview process I asked if they had any objections with me continuing to provide consulting services to the managed service provider who I currently freelance for. They said as long as it doesn't impact on my work for them, it's fine. I was under the impression that under IR35 rules, I could continue working as I have previously, because I am not doing a single job for one employer. My sister who works for a temporary agency says this may or may not be the case. The recruiting company say the job falls "within IR35" which I think means they have determined that I am doing the equivalent job as an employee, and they want me to work under some sort of umbrella company that they already own. Is this normal? It seems to me as if they are just trying to skim off a large part of the available daily rate and pay me a much lower rate. But the rate I have been offered is well below what I would expect for the role, but the original full rate sounds about right for my level of experience and my specialism. I'd like to talk to someone who really knows what's what and can assure me that I'm not being ripped off by this recruiter or umbrella company, because while it would remove liability from me personally, it also seems that I would become an employee for someone else and be sacrificing a huge amount of potential income.
If you can recommend a specialist IR35 accountant or advisor, I would be very appreciative. I've only found out bout this umbrella company thing on Friday, I've worked all weekend, and they are hoping I will accept their terms today, but I'm very apprehensive about the whole thing. I spotted the contractors: toast thread, but I don't have time to read it in full as it's huge! I want to get the maximum out of any contract I do, but I also don't want to diddle the taxman. The country really could do without people messing around. I don't however, particularly want to give away a third of my daily rate to a third-party company just to do PAYE stuff! Thanks!!
In summer 2019 I was made redundant due to team expansion in India, and I had plans to move out of the world of IT and start a fashion business. I went to the London College of Fashion, part of the University of the Arts, London to learn what I could about the specific business I was interested in. I was in the process of meeting potential suppliers in Paris & Milan in Feb/March 2020 when the Coronavirus hit Europe, and I had to put my future business plans on hold.
Since August last year, I've been freelancing for a managed services provider, working on a few projects, working on average 2-3 days a week and invoicing directly. I was only put in touch with them by an ex-colleague and was originally under the impression it would be an afternoon's work helping with my specialist subject.
I have now been offered a full-time IT contract working directly in my specialism. During the interview process I asked if they had any objections with me continuing to provide consulting services to the managed service provider who I currently freelance for. They said as long as it doesn't impact on my work for them, it's fine. I was under the impression that under IR35 rules, I could continue working as I have previously, because I am not doing a single job for one employer. My sister who works for a temporary agency says this may or may not be the case. The recruiting company say the job falls "within IR35" which I think means they have determined that I am doing the equivalent job as an employee, and they want me to work under some sort of umbrella company that they already own. Is this normal? It seems to me as if they are just trying to skim off a large part of the available daily rate and pay me a much lower rate. But the rate I have been offered is well below what I would expect for the role, but the original full rate sounds about right for my level of experience and my specialism. I'd like to talk to someone who really knows what's what and can assure me that I'm not being ripped off by this recruiter or umbrella company, because while it would remove liability from me personally, it also seems that I would become an employee for someone else and be sacrificing a huge amount of potential income.
If you can recommend a specialist IR35 accountant or advisor, I would be very appreciative. I've only found out bout this umbrella company thing on Friday, I've worked all weekend, and they are hoping I will accept their terms today, but I'm very apprehensive about the whole thing. I spotted the contractors: toast thread, but I don't have time to read it in full as it's huge! I want to get the maximum out of any contract I do, but I also don't want to diddle the taxman. The country really could do without people messing around. I don't however, particularly want to give away a third of my daily rate to a third-party company just to do PAYE stuff! Thanks!!
I don't want to come across as being rude but you must have been living under a rock if you're a contractor & not aware of the massive changes introduced by IR35 & in particular those implemented this April. It's a big complex issue & you've got no chance of understanding the implications in an afternoon. In essence HMRC have made the employers responsible for determining if a position is inside or outside IR35 & yours has decided you are inside.
You have a choice: either take the rate or walk away & take some time to investigate the IR35 landscape & what it means for your work.
https://www.contractoruk.com/
You have a choice: either take the rate or walk away & take some time to investigate the IR35 landscape & what it means for your work.
https://www.contractoruk.com/
The employer has to make the determination & many are so concerned about big fines if they get it wrong that they are putiing all positions inside IR35. They then insist that an umbrella is used & only pay the umbrella the 'direct' rate you were expecting. The umbrella then deducts tax & NI & hence you get a lot less money. You are also hit because you lose the ability to claim a lot of expenses.
You have to decide if you want to accept this new rate & way of working. There's probably no point debating it with the client, they will have decided this is how they want to work, at least for now.
Just having multiple clients doesn't mean you are inside or outside IR35. You could have five clients with some inside & some outside, depending on how you are working for them.
Here's a couple of sources to look through:
https://www.caunceohara.co.uk/ir35/
https://www.ipse.co.uk/ir35-hub-ipse/about-ir35.ht...
You have to decide if you want to accept this new rate & way of working. There's probably no point debating it with the client, they will have decided this is how they want to work, at least for now.
Just having multiple clients doesn't mean you are inside or outside IR35. You could have five clients with some inside & some outside, depending on how you are working for them.
Here's a couple of sources to look through:
https://www.caunceohara.co.uk/ir35/
https://www.ipse.co.uk/ir35-hub-ipse/about-ir35.ht...
Others will probably know more than me, but putting it crudely, it’s got nothing to do with a contractor’s accountant.
As others have said, it’s got more to do with the ability of your client’s HR and legal team to create contracts that are IR35 friendly, i.e. work in your favour - as a contractor. IME, HR loathe contractors for whatever reason they choose…
The somewhat incestuous nature of the agency being the umbrella company stinks in my book, and I would be asking as to why can’t have my “own” umbrella agency looking after it. As you say it’s a lot of money to do not that much.
This will continue for some time, but in my field (mech eng) there are a number of contracts that are now coming through as contractor friendly as they realise they might not get anyone. Some are hoping that the shortage of jobs out there mean they can push their luck with rates and commissions, but the last 2 or 3 weeks has seen my inbox have a number of roles available, so this won’t last.
The links above are as good as anything.
To generalise - ignore what the recruitment company say, they are nearly all charlatans…
As others have said, it’s got more to do with the ability of your client’s HR and legal team to create contracts that are IR35 friendly, i.e. work in your favour - as a contractor. IME, HR loathe contractors for whatever reason they choose…
The somewhat incestuous nature of the agency being the umbrella company stinks in my book, and I would be asking as to why can’t have my “own” umbrella agency looking after it. As you say it’s a lot of money to do not that much.
This will continue for some time, but in my field (mech eng) there are a number of contracts that are now coming through as contractor friendly as they realise they might not get anyone. Some are hoping that the shortage of jobs out there mean they can push their luck with rates and commissions, but the last 2 or 3 weeks has seen my inbox have a number of roles available, so this won’t last.
The links above are as good as anything.
To generalise - ignore what the recruitment company say, they are nearly all charlatans…
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