Moving to Ltd during contract renewal(prev umbrella)- risks?

[newbee]

A friend here wants to jump to ltd - which is good, currently with a umbrella.

Current contract ends in June , which has now been extended to end of Dec.
Will HMRC flag this up in anyway since this is mid contract change to ltd?

[chris79]

Technically you are not doing it 'mid-contract' as you are proposing to start the NEW contract (extension) under a new guise (your ltd company).

Probably the safest way is to ensure you (or your friend in this case) are clued up on IR35, as well as everything surrounding running 'a business'. In my own view this is an important aspect of ensuring you can demonstrate to anyone who knocks on the door that you are actually running a business and know what you are doing, are in control of it, etc.

[edit] Sorry, meant to add it would be better to get your ltd company setup and start the contract extension from day #1 under your limited. Probably not a good idea to do it 'mid-contract' if that's what you meant. [/edit]