Is going limited worth it if you are inside IR35?

[d000hg]

You don't seem to have factored in the additional cost of an accountant, which could well be something you'd want as a Ltd but not under a brolly.

[Wanderer]

I could do other bits and pieces for my husband's company

Hang on a minute. Is your husband a director of a limited company? If so, then why not just use that company and save yourself the hassle and expense (insurance, accountants, admin etc) of forming your own company?

[cojak]

Irrespective of the hassle (which isn't much if you are a BOS contractor) I don't like the idea of a different entity being in control of myco's earnings.

There have been stories of umbrellas going belly up, losing not only contractor's profits but the tax that they would still have to pay to HMRC.

[LandRover]

Pros and Cons

As mentioned if you prefer control on your affairs then LTD is preferable to Umbrella, however if you want simple solution with no admin hassle then Umbrella.

Either way I think many will have to decide whether LTD is worth it, as when I look more into the guidance for IR35 its feels as if HMRC will be targeting more LTD companies to prove that they are not IR35.

http://www.hmrc.gov.uk/ir35/guidance.pdf

The new tests imo, will put majority of contractors as Med-High risk according to new tests. Mere words in a contract will mean nothing unless acted upon i.e. Substitution.

Also the IR35 forum and prospective additions to IR35 legislation in 2013 Finance Bill can not imo be a case of simply continuing as usual as if nothing has changed.

Surprised that may feel its not going to affect them, as I talk to colleagues who operate through the likes of SJD Accountancy, they feel as long as they have Substitution clause then they feel thats enough and anyway they say SJD would tell us if we were caught!

[northernladuk]

Surprised that may feel its not going to affect them, as I talk to colleagues who operate through the likes of SJD Accountancy, they feel as long as they have Substitution clause then they feel thats enough and anyway they say SJD would tell us if we were caught!

And those are the fodder I hope HMRC pick on who cannot be bothered to understand and run their LTD's properly first leaving those that do put the effort in alone.

[malvolio]

And those are the fodder I hope HMRC pick on who cannot be bothered to understand and run their LTD's properly first leaving those that do put the effort in alone.

Case Law regarding substitution has been set and has not been appealed. A genuine right to offer a substitute is sufficient, you don't have to exercise it (although if you do it would be good). But as we all know, it has to be genuine.

[northernladuk]

Case Law regarding substitution has been set and has not been appealed. A genuine right to offer a substitute is sufficient, you don't have to exercise it (although if you do it would be good). But as we all know, it has to be genuine.

Indeed but we have had plenty of evidence on here that clients won't and that it is possible for a client to admit that during an investigation. Sitting on your laurels just thinking you have a sub clause in your contract is the most basic thing you can do. I will bet most of the people he is speaking to haven't had their contracts reviewed and all the other stuff that will keep them safe. A sub clause alone isn't sufficient to secure a win.

[LisaContractorUmbrella]

Irrespective of the hassle (which isn't much if you are a BOS contractor) I don't like the idea of a different entity being in control of myco's earnings.

There have been stories of umbrellas going belly up, losing not only contractor's profits but the tax that they would still have to pay to HMRC.

(cough) Darren Upton (cough)

[LisaContractorUmbrella]

Case Law regarding substitution has been set and has not been appealed. A genuine right to offer a substitute is sufficient, you don't have to exercise it (although if you do it would be good). But as we all know, it has to be genuine.

Which means that you also have to know someone who would be capable of replacing you and who would be available should you need cover

[socialworker]

Which means that you also have to know someone who would be capable of replacing you and who would be available should you need cover

Quite which is one good reason why I think I would be at risk trying to be outside IR35. I have done various of the online tests, and could tweak a contract so it passes but it still feels dodgy. Short term subs are not really an option for social work and I wouldnt be in the position to provide one either unless I form a coop and I dont think that is for me.

RE accountant fees, I was thinking that Crunch would be filling that role, their fee constitutes a £50 pm saving over umbrella fee

I am intrigued by the suggestion that I use my husband's company, thanks for the thought but I would have thought that a bit of an obvious device as his company's business bears no relationship whatsoever to mine - does that matter though?

Besides I like my independence and we have rather different views about how to run businesses ....... better we stay seperate for business purposes