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I have been a contractor for 5 years using my limited company to be paid for all the contracts I carry out. I had a conversation with my recruitment agency and they are saying that my job role is inside IR35 so I have to use an umbrella company. Does this sound right or are they trying to blanket asses me?
17 pages, biscuits, tea, no sympathy, 35 bans.
is inside IR35 so I have to use an umbrella company. Does this sound right or are they trying to blanket asses me?
I think its a lot to do with the company you're working for but my last place took a blanket approach for all freelancers and said go through an umbrella company or leave. I think you could come to an agreement with your employer and agree that you sit outside IR36 but that would be require a chat with HR.
You need to discuss with your accountant
You need to go on the government website and take the HMRC CEST assessment to see if you fall inside the ir35 but i think going through an umbrella company will help in the short term.
Do you have just one client or a few?
Are they trying to get you to use their umbrella or just saying you need one?
Umbrella's use a herd effect were as a private limited company can be picked off by HMRC. If you work through agents I would tend towards umbrella.
I am retired some four years so not up to speed on umbrella companies but avoid Giant if they are still going. Slow paying crap communications. Champion were always good. Used them for several years.
Not fully clued up because I'm an employee again now, but towards the end of last tax year I thought there was some guidance issued by HMRC that they would take a dim view on any companies just using a blanket "you're under IR35 now" stance and that all individual contracts should be assessed seperately.
I have been a contractor for 5 years using my limited company to be paid for all the contracts I carry out. I had a conversation with my recruitment agency and they are saying that my job role is inside IR35 so I have to use an umbrella company. Does this sound right or are they trying to blanket asses me?
Sounds like someone hasn't been paying attention, this has been coming for a couple of years now. If it's news to you, and you don't know what your situation is and your options are then, honestly, my sympathy levels are low (and I'm an ex-contractor, I went perm in April, the IR35 changes being one of the drivers of that move).
all individual contracts should be assessed seperately.
It's very easy to assess separately and get the same answer for all...
As above, where have you been for the last few years? The IR35 changes were only delayed because of Covid etc, so you should have been prepared this time last year. What steps have you taken to ensure/prove you are outside IR35 at the moment?
The only thing changing is the fact your client will be making the judgement, not you so you should have some idea of whether your current role is in or out.
I'm aware this sounds judgemental but from the info you've given it sounds like you're a 'permietractor' and you should be inside already, which is exactly what HMRC are trying (badly) to tighten up on.
Edit: You also need to be aware that HMRC will take a dim view on contractors who go from outside to inside at the same client doing the same role so if you go down that route be prepared for a world of pain!
I was (until April 2020) a Ltd Co contractor.
Blanket determinations are not allowed under IR35, however many clients are then simply saying that you must work through an umbrella - as they don't want any future liability if HMRC come looking (which is the effect of the IR35 changes coming in April 2021). This has the benefit to the client that they can't be accussed on blanket determinations, as IR35 no longer even applies.
You basically become a PAYE employee of the umbrella, which has the same tax effect of blanket determining everyone inside IR35.
If this is news to you as a contractor, then you really need to do some research (and quickly). This has been coming since it was announced in the public sector from 2017.
Firstly its the role which is determined inside or out. Not you which is a very important distinction.
You can still have multiple clients (which makes you think you are outside) but for a particular assignment the role might be inside.
You don't have to go umbrella. You can be paid PAYE as a contractor, or stay limited but pay employers NI. Speak to your accountant about that one.
Paying ubrella used to be worthwhile but you now cannot claim home to work travel so just as worthwhile going PAYE and saving your 25 quid a week the umb co charges.
IR35 has always been a law, the difference is who determines if you are inside or out. Used to be the contractor, now its the fee payer. Liability for any missing emp ni also falls to the fee payer so most companies are belt and braces approach.
Disclaimer-veteran of ir35 changes in public sector and also doing 90 determinations in the next few weeks so I hope I know what i am doing...
As above, where have you been for the last few years?
My first thought...
I went Perm nearly 3 years ago, and my OH the year before (she was in the public sector, so hit first by IR35).
Odd first post! A second login or fishing for information?
Apologies OP if you are genuine!