Please bear with me as I am completely new to this. It looks like I am going to be offered my first contract. It will primarily be for support and maintenance of an existing computer system on which I have previously worked as a full time employee. The previous owner for whom I work(ed) has gone out of business, but the system has been bought by another company. It will be direct rather that though an agency, mainly working from home, providing telephone support, monitoring the systems and generally keeping the thing running smoothly (although they may want to be able to use me for other things as the contract goes on, like perhaps work related to ultimately replacing this system – does this put me on dodgy ground IR35 wise ?)
A few other ex employees are also going to be offered contract to do basically the same thing, and between us we will provide the services required. None of us wants to form a single company or partnership, so we would all be individual limited companies or Sole traders, but would liaise to ensure suitable cover is provided 24/7. Is this liaising with other contractors a no-no. In other words, should we insist the client organises which company provides support at which times, rather than doing it between us ? I will have flexibility to choose when I am available, so long as at least one of us is available.
Is it acceptable to use the other contractors as substitutes, with regard to the substitution element of being outside IR35. In other words, could I use one of my ex colleagues as a substitute and pay them myself, if I am unable to provide cover when I have agreed to (eg sickness) even if they also have their own contract with the client.
A colleague has said that contracts which are primarily for support and maintenance, rather than development are unlikely to be outside IR35. I can’t see why that would be, and can find no evidence for this myself, but would greatly appreciate any opinions or advice on this.
My head is spinning with all different options open to me, and particularly how I go about organising everything I need and in which order. I am very risk averse so want all of the comfort factor I can get with regard to IR35 protection. However, it seems that by getting all the requirements from separate places you end up duplicating some of the things.
Here are the things I think I need to get sorted ASAP
1. Get an IR35 friendly contract template – I downloaded one from here Free Guides and Templates - Contractor Guides - IR35 Contracts - Qdos Freelancer Shop, but it gives no clue as to how and where you specify what the contract is for and what services/hours etc you are expecting to provide. How much detail do I go into with regard to what services my company will be providing. It would be good if anyone could point me in the direction of an example of a completed IR35 friendly contract. I presume it is typical for the contractor and not the client to provide the contract. Also I gather PCG will provide a template, as might an accountant.
2. Get contract reviewed for IR35. I was thinking of paying Bauer and Cottrell or QDOS to do this, but also think maybe if I get the right accountant they will do this ? Having said that someone said IR35 contract review is best left to a specialist and not an accountant.
3. Get incorporated. Should I do this myself or is it more common to get an accountant to do this ? I was thinking of doing this on the contractoruk website, or maybe sjdaccountancy website, or should I wait until I choose an accountant
4. Get a bank account – simplest and cheapest seems to be the Cater Allan option offered when incorporating on contractoruk website – good or bad idea ?
5. Get an accountant – I was thinking of sjdaccountancy, although am a bit worried that being at arm’s length it may not be the best option for a newbie. Also it sounds slightly more expensive than the £800/£1000 per year other people have mentioned. I don’t want to pay more and get less. Alternatively I was thinking of Baker Watkin as they are quite local, PCG accredited and say they are IR35 savvy (but no idea how much they charge and what you get for it).
6. Join PCG and decide whether to go standard or plus
7. Decide on and purchase IR35 insurance – I realise that if I go PCG plus then using TCL35 or Abbey Tax insurance is belt and braces/overkill, but don’t mind that for the peace of mind. Also my gut feeling from what i’ve read is that TLC35 would be the best option. However, that would give me a dilemma if I got the HMRC on my back as to who I get to take up my case, PCG or Qdos. If the answer is QDOS, then is there any point in having PCG plus ?
8. Purchase Professional Indemnity Insurance. The only one i’ve looked at is QDOS, and that gives free IR35 contract assessments, which takes me back to step 1 !!
It seems I need to involve at least 5 or 6 organisations just for these basics, and I don’t know in what sequence. I wish there was just one place I could go to get the whole lot sorted out. Is that what a good accountant would do ? Even having read the SJD Accountancy and PCG freelancing guides cover to cover, and am still confused and bewildered.
Sorry for the rambling and slightly unfocused post, but like I said, my head is spinning and the option of going Umbrella and forgetting the whole sorry mess seems like an attractive but expensive option at this point in time.
A few other ex employees are also going to be offered contract to do basically the same thing, and between us we will provide the services required. None of us wants to form a single company or partnership, so we would all be individual limited companies or Sole traders, but would liaise to ensure suitable cover is provided 24/7. Is this liaising with other contractors a no-no. In other words, should we insist the client organises which company provides support at which times, rather than doing it between us ? I will have flexibility to choose when I am available, so long as at least one of us is available.
Is it acceptable to use the other contractors as substitutes, with regard to the substitution element of being outside IR35. In other words, could I use one of my ex colleagues as a substitute and pay them myself, if I am unable to provide cover when I have agreed to (eg sickness) even if they also have their own contract with the client.
A colleague has said that contracts which are primarily for support and maintenance, rather than development are unlikely to be outside IR35. I can’t see why that would be, and can find no evidence for this myself, but would greatly appreciate any opinions or advice on this.
My head is spinning with all different options open to me, and particularly how I go about organising everything I need and in which order. I am very risk averse so want all of the comfort factor I can get with regard to IR35 protection. However, it seems that by getting all the requirements from separate places you end up duplicating some of the things.
Here are the things I think I need to get sorted ASAP
1. Get an IR35 friendly contract template – I downloaded one from here Free Guides and Templates - Contractor Guides - IR35 Contracts - Qdos Freelancer Shop, but it gives no clue as to how and where you specify what the contract is for and what services/hours etc you are expecting to provide. How much detail do I go into with regard to what services my company will be providing. It would be good if anyone could point me in the direction of an example of a completed IR35 friendly contract. I presume it is typical for the contractor and not the client to provide the contract. Also I gather PCG will provide a template, as might an accountant.
2. Get contract reviewed for IR35. I was thinking of paying Bauer and Cottrell or QDOS to do this, but also think maybe if I get the right accountant they will do this ? Having said that someone said IR35 contract review is best left to a specialist and not an accountant.
3. Get incorporated. Should I do this myself or is it more common to get an accountant to do this ? I was thinking of doing this on the contractoruk website, or maybe sjdaccountancy website, or should I wait until I choose an accountant
4. Get a bank account – simplest and cheapest seems to be the Cater Allan option offered when incorporating on contractoruk website – good or bad idea ?
5. Get an accountant – I was thinking of sjdaccountancy, although am a bit worried that being at arm’s length it may not be the best option for a newbie. Also it sounds slightly more expensive than the £800/£1000 per year other people have mentioned. I don’t want to pay more and get less. Alternatively I was thinking of Baker Watkin as they are quite local, PCG accredited and say they are IR35 savvy (but no idea how much they charge and what you get for it).
6. Join PCG and decide whether to go standard or plus
7. Decide on and purchase IR35 insurance – I realise that if I go PCG plus then using TCL35 or Abbey Tax insurance is belt and braces/overkill, but don’t mind that for the peace of mind. Also my gut feeling from what i’ve read is that TLC35 would be the best option. However, that would give me a dilemma if I got the HMRC on my back as to who I get to take up my case, PCG or Qdos. If the answer is QDOS, then is there any point in having PCG plus ?
8. Purchase Professional Indemnity Insurance. The only one i’ve looked at is QDOS, and that gives free IR35 contract assessments, which takes me back to step 1 !!
It seems I need to involve at least 5 or 6 organisations just for these basics, and I don’t know in what sequence. I wish there was just one place I could go to get the whole lot sorted out. Is that what a good accountant would do ? Even having read the SJD Accountancy and PCG freelancing guides cover to cover, and am still confused and bewildered.
Sorry for the rambling and slightly unfocused post, but like I said, my head is spinning and the option of going Umbrella and forgetting the whole sorry mess seems like an attractive but expensive option at this point in time.
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