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b r
2nd June 2017, 07:53
I was just reading this thread:

http://forums.contractoruk.com/public-sector-ir35/121773-wrong-tax-calculation.html

And Eek said something along the lines of "recommended to use an Umbrella when inside IR35".

I was approached yesterday about a PS contract, from an Agency who I've worked with before, and the PS client specifically excludes paying via an Umbrella, with the two options been:

1 PAYE - including holiday/sickness pay, or,
2 Payment into my Ltd Co. net of income tax and employee & employer NI

It seems that PAYE would be most cost effective unless there was someway of claiming back (any) expenses as it's a stay-away/long-commute job - is there a way of me claiming my expenses thru self-assessment (ie I work for my Ltd that is based at home and could at least get the tax back on mileage)?

Any other thoughts?

mudskipper
2nd June 2017, 08:20
I was just reading this thread:

http://forums.contractoruk.com/public-sector-ir35/121773-wrong-tax-calculation.html

And Eek said something along the lines of "recommended to use an Umbrella when inside IR35".

I was approached yesterday about a PS contract, from an Agency who I've worked with before, and the PS client specifically excludes paying via an Umbrella, with the two options been:

1 PAYE - including holiday/sickness pay, or,
2 Payment into my Ltd Co. net of income tax and employee & employer NI

It seems that PAYE would be most cost effective unless there was someway of claiming back (any) expenses as it's a stay-away/long-commute job - is there a way of me claiming my expenses thru self-assessment (ie I work for my Ltd that is based at home and could at least get the tax back on mileage)?

Any other thoughts?

No. If IR35 caught, the client site becomes your "permanent workplace" for the duration of the contract, and your travel and subsistence are not allowable expenses. This applies however you operate. You need to consider this extra tax burden when negotiating a rate for the contract.

eek
2nd June 2017, 11:40
It's worth saying the reason why I suggested using an umbrella in that case was because it was clear the agency is utterly unable to handle the withholding figures correctly.

Being honest the order of payment options I would use myself is as follows:-

1) Umbrella company - assuming they can do salary scarifice on anything above living wage and I want to put money into a pension
2) PAYE via agency
3) Umbrella company
4) limited company with tax withheld....

And as MS states above remember you can't claim T&S expenses as for an IR35 contract their office is your permanent place of work...

psychocandy
6th June 2017, 07:39
Now I'd do it other way round if I could. Assuming existing ltd....

But current agency wont do it. So Im paying half rate for accountant and paying umbrella fees too. And theres one more person to deal with to screw things up. (Accountants are brill mind - new umbrella are crap).