Redundant and re-employed as a consultant

Madryn

princessdon wrote: »

Logic tells you that Hmrc won't like a 30k tax free sum then return to work. What their trigger is to look at the figure I have no idea. As my oh payment was way over the 30k most but not all were pure exgratia. Some were not, the chance of looking closely was something we wanted to avoid.

I'm starting to think that a) the logic of IR35 probably applies to the case of my endangered tax-free £30K and b) having looked through the IR35 pages on the hmrc website I need to speak to a specialist accountant about the wider implications of IR35 to my proposed business.

At least I now know a bit more of what I didn't know (to misquote Donald Rumsfeld).

Thank you

Madryn

Madryn

lr1277 wrote: »

I was under the impression that umbrella companies were just that. An umbrella for your company. So you may still have to set up a limited company, but they would handle the invoicing and make account production easier for you.

There is another way forward which is to work for an agency, if your employer is agreeable. See if there are any agencies they use.
Otherwise agencies would bite your arm off if you say you will work with them as you have a definite contract. This gets over the problem of setting up your own company and producing accounts etc. Also gets over the IR35 problem, which I understands affects a broad range of industries, not just IT consultancy.

HTH

I looked up a couple of umbrella company websites that were referenced to me and it appears that the options are umbrella (where they act as the limited company and you are their employee) versus limited company (where you are the owner and employ yourself).

I'm now investigating the agency option.

Cheers

Madryn

princessdon

investigate your current relevant cirs. IR35 should not have an impact on PAYE and redundancy. Where it does have an effect is the NIC's contribution. Ie if you need to pay employee and employer NIC's as inside IR35 then consider a brolly for distance.

if you are outside IR35 (Ie will have another client) then paying 2 sets of NIC's and a brolly doesn't make sense.

Good luck anyway and yes a brolly basically means NO Ltd company (the two don't equate). If you can avoid 2 sets of NIC's and IR35 use an LTD. If this is a short term or inside IR35 then consider a brolly. I would never pay more NIC's than needed - but for a short term whilst considering my future or to gain more SE experience I wouldn't rule it out.

Keep on investigating what is right for YOU and your circs. Any questions re Inside/Outside IR35 and benefits of brolly/ltd please ask

pleasedelete

princessdon wrote: »

if you are outside IR35 (Ie will have another client) then paying 2 sets of NIC's and a brolly doesn't make sense.

ask

Having another client doesn't mean you will be outside ir35. It is possible to have contracts where ir35 may apply and others where it doesn't at the same time.

It may be an indicator of lower risk but if the contract falls foul of ir35 it doesn't matter if you have another contract.