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So, I'm an IT contractor with specific skills related to a client's needs. Am I supposed to understand all the tax / employment laws? No, I go to someone with specific skills (an accountant perhaps?). Maybe they shouldn't make it so effing complicated
Absolutely. To most genuine contractors the main beef with IR35 has always been that it was never black and white. The 'service company' question(s) on the tax returns only served to confuse things further!
I stopped contracting in '97, was with Giant with their composite company but they stopped it saying too risky now.I know of someone who had an offshore company he contracted through, IR decided he owed £300k but doubled it up to include a fine.
Giant (and several other umbrella companies) had rather a reputation for sailing close to the wind in terms of the legality of their tax avoidance/evasion methods (as with most things that seem too good to be true...). It wasn't that surprising when they got targeted by HMRC a couple of years back - big potential 'win' for them because of the number of people grouped together under such schemes.
Hence my warning about it ultimately being your own tax responsibility - Giant are still going.. I wonder how many of their original scheme members are?
Let's hope the changes that may be coming will make things better and not worse!
If in the Giant composite company you had insurance against what the IR might do so hopefully that covers OK. Umbrella companies are always OK aren't they - assuming expenses done properly anyway.
If in the Giant composite company you had insurance against what the IR might do so hopefully that covers OK. Umbrella companies are always OK aren't they - assuming expenses done properly anyway.
It depends what the insurance was for.. if it was IR35 insurance then I doubt that would have covered it - if I remember correctly the schemes were channelling funds via offshore companies to avoid tax.
A strict PAYE scheme through an umbrella company should in theory be ok if, as you mention, everything else (expenses etc.) is above board..