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Why are umbrella companies being required more often?

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    #21
    Originally posted by willendure View Post
    I've seen this "Contractor Umbrella" company mentioned a few times on these forums. From their FAQ:

    https://www.contractorumbrella.com/r...pany-employee/

    See "Are any other expenses claimable?"

    "Expenses can still be paid – but these must be approved by your recruitment agency and paid over in addition to your normal daily or hourly pay rate. This matches the treatment that permanent, full-time employees can expect – expenses must be submitted, approved and reimbursed on top of salary. These are known as chargeable expenses."

    Is that simply untrue then?
    It means expenses incurred whilst carrying out the assignment. The client wants you to travel to another office. You incur costs which are reclaimed from the client. No expenses around you doing business.

    Keep guessing though. At some point you might get something right.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

    Comment


      #22
      Originally posted by willendure View Post
      I see a lot of contract ads now specify that an umbrella company must be used, not own ltd. For contracts inside IR35. Does anyone know why this is? It is perfectly possible to be inside IR35 and still go through your own ltd., so I am not understanding why brollies are being mandated.
      The long and the short of it is there is no incentive for the agent to allow you to operate through your own LtdCo on an inside role, the (perceived) benefit is for the contractor and therefore not their concern so why should they
      Originally posted by Stevie Wonder Boy
      I can't see any way to do it can you please advise?

      I want my account deleted and all of my information removed, I want to invoke my right to be forgotten.

      Comment


        #23
        Originally posted by willendure View Post
        Makes sense. If my Ltd. doesn't pay the right taxes, agency or even client is on the hook.

        My specific problem is... my Ltd. own its own office building on which it pays a mortgage, heating, electricity, insurance, repairs, computers, internet/phone etc. So I need money coming through the Ltd. to cover all these expenses. I would like to remain outside IR35 and operate as a genuine business, but if there will be no possibility of finding a contract that would allow this after April, things are a bit screwed for the Ltd.

        Perhaps I could pay my Ltd. rent on the office...

        Or else I am going to have to wind the Ltd. down and transfer the assets to myself, which will no doubt incur a big fat tax bill (and repaying of the mortgage).
        Erm, if your contract is deemed inside IR35, there are effectively no 'expenses' such as mortgage, heating etc your company can claim.

        Determining IR35 status means there are less limited contractor companies able to write neferious expenses off to tax while also meaning a bigger tax take for HMRC at source. Pay up first and we'll argue later in effect.

        What am I missing here?

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          #24
          Fair enough regarding comments about it not being allowable expense.

          I think the only way to keep the Ltd and office going will be to pay rent to the Ltd myself, out of taxed salary. Longer term, work out how to close the Ltd down and transfer ownership of the building to myself.

          Comment


            #25
            Originally posted by PCTNN View Post
            most contractors are in fact permies in disguise.
            Originally posted by vwdan View Post
            Scaring companies into being risk-averse and chucking everybody through brollies says jack all apart from they don't want to HMRCs next cash cow.
            both of these are true
            See You Next Tuesday

            Comment


              #26
              Originally posted by TheDogsNads View Post
              Erm, if your contract is deemed inside IR35, there are effectively no 'expenses' such as mortgage, heating etc your company can claim.

              Determining IR35 status means there are less limited contractor companies able to write neferious expenses off to tax while also meaning a bigger tax take for HMRC at source. Pay up first and we'll argue later in effect.

              What am I missing here?
              Not much. What people continually fail to realise is that the Company is an entity in its own right, that you are working for in order to generate its income so it can pay you a suitable wage and it can survive the lean times.

              Instead they treat it as a tax mitigation device, often with unrealistic ideas over what is and isn't allowable.

              And that's why we have IR35 and all the other limitations on how we make our living.
              Blog? What blog...?

              Comment


                #27
                Originally posted by willendure View Post
                Fair enough regarding comments about it not being allowable expense.

                I think the only way to keep the Ltd and office going will be to pay rent to the Ltd myself, out of taxed salary. Longer term, work out how to close the Ltd down and transfer ownership of the building to myself.
                Assuming the office is a reasonably high-valued asset, you want to talk to an MVL specialist. They will be able to liquidate your company and free the assets. The transfer of the office toy yourself will simply be a paper purchase where you buy the office from the company and then take the money back at liquidation.
                It needs doing right so get a specialist.
                See You Next Tuesday

                Comment


                  #28
                  Originally posted by Lance View Post
                  Assuming the office is a reasonably high-valued asset, you want to talk to an MVL specialist. They will be able to liquidate your company and free the assets. The transfer of the office toy yourself will simply be a paper purchase where you buy the office from the company and then take the money back at liquidation.
                  It needs doing right so get a specialist.
                  The mortgage makes things rather more complex than would otherwise be the case.
                  merely at clientco for the entertainment

                  Comment


                    #29
                    Originally posted by eek View Post
                    The mortgage makes things rather more complex than would otherwise be the case.
                    Agreed. And the first question is who's name is it in...?
                    Blog? What blog...?

                    Comment


                      #30
                      Originally posted by eek View Post
                      The mortgage makes things rather more complex than would otherwise be the case.
                      oh. sorry. I misread. I though I saw that the business owned an asset rather than owed the bank.
                      yeah. You can't do an MVL when there are creditors.

                      Standard business practise in the UK would be to stop paying the mortgage and then the bank will wind the company for you. I'm not saying this is good practise but it is common.
                      See You Next Tuesday

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