MSC to Limiteds

[Denny]

[remove]

[Diestl]

If you are a Ltd, and outside Ir35 and accounts are all fine, then it doesn't matter, even if you call the company LtdToAvoidTax Ltd and register it on the day the legislation comes in, you aren't breaking the law.

[jh0711]

thats a good point - from what I can gather a lot of people using composites are not really outside of IR35 they have just been winging it (on the advice of those who run the MSC no doubt) because both the punter and the MSC will earn more money.

if you move to a ltd only earn say £50k per year pay yourself minimum wage and then take the rest as dividends you may as well be waving a big flag saying 'dodgy accounts'


probably

[Nixon Williams]

More tax initially may save you heaps more down the line and I suspect that the short term panic move to go limited over the next few months is more likely to do you (and possibly the rest of the limited co fraternity who genuinely operate outside IR35) more harm than good.

Quite a bit more tax really, and even if the contract is caught by IR35 you would be better off with your own Ltd Company.

An umbrella is only an option if you cannot handle simple paperwork and/or if you are only going to be contracting for a few weeks.

Alan

[jh0711]

it is a good point Alan I believe there are VAT benefits (to do with flat rate vat - no idea of how it works)
however what about
Insurances (employers, public liability and PI)
initial cost of company formation
etc etc etc

these are all costs people would need to find money for up front when they move from MSC to LTD

you need to remember that there are a lot of people in the 10-15 quid per hour bracket who do helpdesk etc who simply do not have the spare funds for an initial outlay of that magnitude.

a lot of contractors using MSC (and brollies) would prefer to be paid PAYE directly to avoid the extra hassle and costs involved with either brollies or ltd's

but as many agencies do not offer this they choose brollies because they are quicker and simpler.

probably

[gingerjedi]

Surely a good agent can do PAYE? mine (Modis) has the option if I like.

[jh0711]

if inside IR35 and not claiming expense it may be the way to go - however be aware your rate will drop if you go PAYE direct with agency as they will start to incur the employer costs (holiday pay, employers NI etc) they may also charge a small fee for PI insurance.

[Cowboy Bob]

Surely a good agent can do PAYE? mine (Modis) has the option if I like.

DP Connect do PAYE as well.

[jh0711]

do either dp or modis try to disencourage (???) you from going PAYE?

[Cowboy Bob]

if inside IR35 and not claiming expense it may be the way to go - however be aware your rate will drop if you go PAYE direct with agency as they will start to incur the employer costs (holiday pay, employers NI etc) they may also charge a small fee for PI insurance.

No it won't. I said this in another post replying to you. Yes your rate on paper will look lower, but your take home will be exactly the same.