IR35 and Umbrella Companies Confused
Discussion
essayer said:
I guess if you rustled up an additional £600pm of allowable expenses you could be around £6200 but seems a stretch - based on £80k gross profit and no employer NICs your personal tax would be around £12500pa
YMMV - dependent on tax codes, other income etc
Theres certainly other allowable expenses which can be reasonably significant (and a PAYE employee would have to pay after tax) but even taking your £5,666 per month "worst case" scenario, that still translates to an equivalent of £103,750 of a PAYE salary, so lets not lose sight of that.YMMV - dependent on tax codes, other income etc
And as i said, most of us dont do it purely for the money, there are significant other motivations too.
Lord Marylebone said:
I work in Housing so get brought into places when they are generally struggling with something.
Spent the last few months getting 4 new social housing estates from being stalled ideas to actually starting on site in about 4 months time, which is great.
I'm also helping another housing association with a load of 'no win no fee' claims that they have had come in.
I like it.
Sounds good. Its nice to make a difference. I've been in previous roles where you're maybe on a support team where "success" was the system being up, but did make for a dull working week.Spent the last few months getting 4 new social housing estates from being stalled ideas to actually starting on site in about 4 months time, which is great.
I'm also helping another housing association with a load of 'no win no fee' claims that they have had come in.
I like it.
I enjoy it too. I'll keep doing it as long as i can get contract work that i want to do. That might be my next contract away or it might be 10 years away. We'll see
Deep Thought said:
Sounds good. Its nice to make a difference. I've been in previous roles where you're maybe on a support team where "success" was the system being up, but did make for a dull working week.
I enjoy it too. I'll keep doing it as long as i can get contract work that i want to do. That might be my next contract away or it might be 10 years away. We'll see
I think exactly the same. My last job could be this one or could be years away! Just have to see how it goes.I enjoy it too. I'll keep doing it as long as i can get contract work that i want to do. That might be my next contract away or it might be 10 years away. We'll see
Fortunately I 'work for' a large consultancy company. They are quite well known within the property industry, and their main role is to constantly look for work for all the consultants like me.
When they find work for us to do, they then send us to the customer as though we are an employee of theirs. I just bill them at the end of every month for my days and they pay me.
They stick about 20% on top of my day rate and bill the customer.
Some of the other consultants have been with the company many years, others dip in and out as they need work.
My current client seems to be following the rest of the big firms and issuing a blanket inside for everyone just to keep things simple for themselves.
However, because of the IR35 change and hassle they have also decided to stop using UK contractors and are bringing in consultants from Eastern Europe. So a massive loss for HMRC and the UK Economy.
However, because of the IR35 change and hassle they have also decided to stop using UK contractors and are bringing in consultants from Eastern Europe. So a massive loss for HMRC and the UK Economy.
rustyuk said:
My current client seems to be following the rest of the big firms and issuing a blanket inside for everyone just to keep things simple for themselves.
However, because of the IR35 change and hassle they have also decided to stop using UK contractors and are bringing in consultants from Eastern Europe. So a massive loss for HMRC and the UK Economy.
The crowd i am with are apparently going to offer all contractors fixed term contracts with some sort of uplift over FTE rates.However, because of the IR35 change and hassle they have also decided to stop using UK contractors and are bringing in consultants from Eastern Europe. So a massive loss for HMRC and the UK Economy.
I dont think thats going to go as well for them as they expect....
rustyuk said:
Eric Mc said:
What do you mean by "bringing in"?
Using the services of an Easter European consultancy to work on the project. Staff will be UK based whilst working on the project. So, what are the savings for the employer - tax or otherwise (apart from maybe paying them lower salaries)?
Eric Mc said:
rustyuk said:
Eric Mc said:
What do you mean by "bringing in"?
Using the services of an Easter European consultancy to work on the project. Staff will be UK based whilst working on the project. So, what are the savings for the employer - tax or otherwise (apart from maybe paying them lower salaries)?
If not i'm sure the consultancy will be well aware of what length of time to allow them to stay so they arent treated as resident.
Eric Mc said:
rustyuk said:
Eric Mc said:
What do you mean by "bringing in"?
Using the services of an Easter European consultancy to work on the project. Staff will be UK based whilst working on the project. So, what are the savings for the employer - tax or otherwise (apart from maybe paying them lower salaries)?
Deep Thought said:
I would say the reality is they'll come over for a period of time then take the work back with them to complete.
If not i'm sure the consultancy will be well aware of what length of time to allow them to stay so they arent treated as resident.
Is that really what will happen?If not i'm sure the consultancy will be well aware of what length of time to allow them to stay so they arent treated as resident.
My situation is the other way round. I'm a sole trader, rarely working more than a day at a time all for different clients.
But as of April one company I do work for will only engage LTD companies thus forcing many of us to do what HMRC would rather we didn't, ie become one person LTD companies.
It's going to be expensive and I don't pull in a large amount as a sole trader anymore, well not enough to go to the expense and hassle of being LTD.
Does anyone know if I can use an umbrella company just to do this 2 week job in the summer?
Sorry if a daft question but I can't get a straight answer from anyone in my industry, television, or even my current accountant, who despite having done my accounts for 20 years, doesn't do LTD companies.
But as of April one company I do work for will only engage LTD companies thus forcing many of us to do what HMRC would rather we didn't, ie become one person LTD companies.
It's going to be expensive and I don't pull in a large amount as a sole trader anymore, well not enough to go to the expense and hassle of being LTD.
Does anyone know if I can use an umbrella company just to do this 2 week job in the summer?
Sorry if a daft question but I can't get a straight answer from anyone in my industry, television, or even my current accountant, who despite having done my accounts for 20 years, doesn't do LTD companies.
Eric Mc said:
Deep Thought said:
I would say the reality is they'll come over for a period of time then take the work back with them to complete.
If not i'm sure the consultancy will be well aware of what length of time to allow them to stay so they arent treated as resident.
Is that really what will happen?If not i'm sure the consultancy will be well aware of what length of time to allow them to stay so they arent treated as resident.
Some stay longer.
They are all employees of the consultancy, not contractors.
croyde said:
My situation is the other way round. I'm a sole trader, rarely working more than a day at a time all for different clients.
But as of April one company I do work for will only engage LTD companies thus forcing many of us to do what HMRC would rather we didn't, ie become one person LTD companies.
It's going to be expensive and I don't pull in a large amount as a sole trader anymore, well not enough to go to the expense and hassle of being LTD.
Does anyone know if I can use an umbrella company just to do this 2 week job in the summer?
Sorry if a daft question but I can't get a straight answer from anyone in my industry, television, or even my current accountant, who despite having done my accounts for 20 years, doesn't do LTD companies.
I cant see them having an issue with you using an Umbrella co. They are set up to facilitate things like this.But as of April one company I do work for will only engage LTD companies thus forcing many of us to do what HMRC would rather we didn't, ie become one person LTD companies.
It's going to be expensive and I don't pull in a large amount as a sole trader anymore, well not enough to go to the expense and hassle of being LTD.
Does anyone know if I can use an umbrella company just to do this 2 week job in the summer?
Sorry if a daft question but I can't get a straight answer from anyone in my industry, television, or even my current accountant, who despite having done my accounts for 20 years, doesn't do LTD companies.
Lord Marylebone said:
I think exactly the same. My last job could be this one or could be years away! Just have to see how it goes.
Fortunately I 'work for' a large consultancy company. They are quite well known within the property industry, and their main role is to constantly look for work for all the consultants like me.
When they find work for us to do, they then send us to the customer as though we are an employee of theirs. I just bill them at the end of every month for my days and they pay me.
They stick about 20% on top of my day rate and bill the customer.
Some of the other consultants have been with the company many years, others dip in and out as they need work.
Bit of a loaded question here, but if the IR35 legislation change does get passed in March and the end clients gets to determine the employment status of that specific role, how do you think this will affect you and your role?Fortunately I 'work for' a large consultancy company. They are quite well known within the property industry, and their main role is to constantly look for work for all the consultants like me.
When they find work for us to do, they then send us to the customer as though we are an employee of theirs. I just bill them at the end of every month for my days and they pay me.
They stick about 20% on top of my day rate and bill the customer.
Some of the other consultants have been with the company many years, others dip in and out as they need work.
Eric Mc said:
rustyuk said:
Eric Mc said:
What do you mean by "bringing in"?
Using the services of an Eastern European consultancy to work on the project. Staff will be UK based whilst working on the project. So, what are the savings for the employer - tax or otherwise (apart from maybe paying them lower salaries)?
Autopilot said:
Lord Marylebone said:
I think exactly the same. My last job could be this one or could be years away! Just have to see how it goes.
Fortunately I 'work for' a large consultancy company. They are quite well known within the property industry, and their main role is to constantly look for work for all the consultants like me.
When they find work for us to do, they then send us to the customer as though we are an employee of theirs. I just bill them at the end of every month for my days and they pay me.
They stick about 20% on top of my day rate and bill the customer.
Some of the other consultants have been with the company many years, others dip in and out as they need work.
Bit of a loaded question here, but if the IR35 legislation change does get passed in March and the end clients gets to determine the employment status of that specific role, how do you think this will affect you and your role?Fortunately I 'work for' a large consultancy company. They are quite well known within the property industry, and their main role is to constantly look for work for all the consultants like me.
When they find work for us to do, they then send us to the customer as though we are an employee of theirs. I just bill them at the end of every month for my days and they pay me.
They stick about 20% on top of my day rate and bill the customer.
Some of the other consultants have been with the company many years, others dip in and out as they need work.
x5x3 said:
Autopilot said:
Lord Marylebone said:
I think exactly the same. My last job could be this one or could be years away! Just have to see how it goes.
Fortunately I 'work for' a large consultancy company. They are quite well known within the property industry, and their main role is to constantly look for work for all the consultants like me.
When they find work for us to do, they then send us to the customer as though we are an employee of theirs. I just bill them at the end of every month for my days and they pay me.
They stick about 20% on top of my day rate and bill the customer.
Some of the other consultants have been with the company many years, others dip in and out as they need work.
Bit of a loaded question here, but if the IR35 legislation change does get passed in March and the end clients gets to determine the employment status of that specific role, how do you think this will affect you and your role?Fortunately I 'work for' a large consultancy company. They are quite well known within the property industry, and their main role is to constantly look for work for all the consultants like me.
When they find work for us to do, they then send us to the customer as though we are an employee of theirs. I just bill them at the end of every month for my days and they pay me.
They stick about 20% on top of my day rate and bill the customer.
Some of the other consultants have been with the company many years, others dip in and out as they need work.
I have seen a few people working on NHS contracts (not I.T.) and they get 2 payslips from the Umbrella co. one is around £500 pm with tax and ni noted but obviously little or no tax paid and then another big payslip with no tax or ni, when questioned the Umbrella company says it is only a loan at that point as they do not know when the contract will end...this is utter BS as the people have worked there for a few years non stop and they feel the Umbrella co will sort out any tax issues...they will just fold like a cheap umberlla and HMRC will go after the worker...this is all because the NHS had some rule change and needed to pay out less to individuals with Ltd co.s
Caddyshack said:
I have seen a few people working on NHS contracts (not I.T.) and they get 2 payslips from the Umbrella co. one is around £500 pm with tax and ni noted but obviously little or no tax paid and then another big payslip with no tax or ni, when questioned the Umbrella company says it is only a loan at that point as they do not know when the contract will end...this is utter BS as the people have worked there for a few years non stop and they feel the Umbrella co will sort out any tax issues...they will just fold like a cheap umberlla and HMRC will go after the worker...this is all because the NHS had some rule change and needed to pay out less to individuals with Ltd co.s
It sounds like they are not using a reputable Umbrella company.There are some Umbrella companies that profess that they can get you as high as 90% of your day rate tax free however this is usually done via some sort of dodgy loan scheme.
HMRC are fully aware of this and as you say are quite capable of pursuing the individual.
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