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philo
16th March 2017, 11:30
Hi all

I've been offered a new contract but it will be inside IR35 with a new company and new agency.

The day rate is ok - obviously gonna take a hit on the pay a bit but beats time on the bench.

Other than paying the extra tax, nics, umbrella company charges what are the complications for next contract if its outside IR35?

Louisa@AardvarkAccounting
16th March 2017, 11:44
what are the complications for next contract if its outside IR35?

If you get another contract at a later date, which is outside of IR35 then you could consider putting this through a Ltd company.

It will depend on a number of circumstances; how long you are thinking of contracting for? Expected income? Is it public sector?

But if you have a change in client or status, then you should phone around accountants to get some advice on what's best based on your circumstances.

You'll just need to stop with the umbrella company, get your P45 as your employment will have ceased and then move on... :happy

northernladuk
16th March 2017, 11:49
IR35 is on a contract by contract basis and each is judged on its own merits. Nothing to do with the previous gig and its status.

philo
16th March 2017, 11:57
I've been contracting about 3 years through my own LTD.

I was more thinking if i do this contract for 3 or 6 months via an umbrella and then in July start another contract outside IR35 through LTD company does it get complicated tax wise considering what I've already earned - salary taken rather than dividends?

I'll run it past my accountant just wanted to get some real world advice from other contractors

northernladuk
16th March 2017, 11:58
I've been contracting about 3 years through my own LTD.

I was more thinking if i do this contract for 3 or 6 months via an umbrella and then in July start another contract outside IR35 through LTD company does it get complicated tax wise considering what I've already earned - salary taken rather than dividends?

I'll run it past my accountant just wanted to get some real world advice from other contractors

It might be a little out of the norm but that's why you a pay a professional to sort it for you :D

Won't be a problem really. Just get that money coming in!

Louisa@AardvarkAccounting
16th March 2017, 12:02
I've been contracting about 3 years through my own LTD.

I was more thinking if i do this contract for 3 or 6 months via an umbrella and then in July start another contract outside IR35 through LTD company does it get complicated tax wise considering what I've already earned - salary taken rather than dividends?

I'll run it past my accountant just wanted to get some real world advice from other contractors

It's not complicated as such. It's no different to switching to Ltd mid tax year, when you might have been employed already previously in the year.

You just need to consider any brolly income that you have, will be additional personal income so to include this when considering what taxes will be due on your dividends.

Plus, if you have previous brolly income (salary), you'll just want to make sure you've had enough earnings in the year to meet any NI thresholds for your stamp towards your state pension.

:happy

philo
16th March 2017, 12:05
Thanks for responses.

I started contracting midway through the tax year so sounds like it would just be similar to that.

eek
16th March 2017, 12:20
It's not complicated as such. It's no different to switching to Ltd mid tax year, when you might have been employed already previously in the year.

You just need to consider any brolly income that you have, will be additional personal income so to include this when considering what taxes will be due on your dividends.

Plus, if you have previous brolly income (salary), you'll just want to make sure you've had enough earnings in the year to meet any NI thresholds for your stamp towards your state pension.

:happy

Thanks for that. I've just posted http://forums.contractoruk.com/public-sector-ir35/120246-things-do-case-you-end-up-inside-ir35-contract.html as you reminded me that its not worth paying yourself a salary now if you end up with an inside IR35 contract later in the tax year.

Best not to pay any salary at all to begin with and then do it in 1 lump sum later in the year once you know what salary you can pay yourself.