I have been using an umbrella company on a contract via an agency with a public sector client at 400pd for over a year. I used an umbrella because I was worried about IR35 and because I wasn't sure contracting was for me.
The end client has offered me a renewal (the end of the current contract is the end of this month). I have now decided that I like the contractor lifestyle and that given that the client is open to substitution and subcontracting (other contractors on site have actually substituted), if the contract includes this there shouldn't be any IR35 problem, and so I want to move over to using my limited company (which I have already set up but which is currently dormant).
I have not actually seen the contract between the umbrella and the agency (this seems wrong to me, although I am not technically a party to it), but I suppose I need to ask the agent to contract with my limited company on terms that are outside IR35 when the current contract with the umbrella expires. Two questions:
1) The end client is making all limited company contractors take the business entity tests and report the results. I realize the points do not really matter from a legal perspective, only in preventing investigation, but does the fact that I am using an umbrella now mean that I will have worked for the end client "on PAYE employment terms" and hence lose 15 points under the "previous PAYE" test? It seems ambiguous.
2) What should I actually do now? I think I should speak to the agent saying I want to change, get them to send me a proposed contract, and get it reviewed. They seem to be fairly clueless so I am not sure the best way to approach this.
If necessary I can of course find another end client but would rather not do so at the moment or indeed have any avoidable bench time.
Thanks.
The end client has offered me a renewal (the end of the current contract is the end of this month). I have now decided that I like the contractor lifestyle and that given that the client is open to substitution and subcontracting (other contractors on site have actually substituted), if the contract includes this there shouldn't be any IR35 problem, and so I want to move over to using my limited company (which I have already set up but which is currently dormant).
I have not actually seen the contract between the umbrella and the agency (this seems wrong to me, although I am not technically a party to it), but I suppose I need to ask the agent to contract with my limited company on terms that are outside IR35 when the current contract with the umbrella expires. Two questions:
1) The end client is making all limited company contractors take the business entity tests and report the results. I realize the points do not really matter from a legal perspective, only in preventing investigation, but does the fact that I am using an umbrella now mean that I will have worked for the end client "on PAYE employment terms" and hence lose 15 points under the "previous PAYE" test? It seems ambiguous.
2) What should I actually do now? I think I should speak to the agent saying I want to change, get them to send me a proposed contract, and get it reviewed. They seem to be fairly clueless so I am not sure the best way to approach this.
If necessary I can of course find another end client but would rather not do so at the moment or indeed have any avoidable bench time.
Thanks.
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