IR35, ltd company and impending emigration..

[sophiedb]

hi all,

I am working for a company 70 miles from home via a recruitment agency. It's a short-term contract (currently 1-2 months) and if I was to do the limited company thing I'm sure it would come under IR35 (I was interviewed by the manager where I'm now working regards my ability to do the job - so no substitution allowed - I have to work there on their equipment etc). Commuting is expensive though, and accommodation up there would be even pricier.

So I'm tempted by the limited company route anyway, in any attempt to keep some more of this money in my bank account - especially after being contacted about better paying contracts once this one runs out. But but but in 4-5 months' time we're emigrating to New Zealand.

Reading this forum has convinced me (not that I wasn't before) that DIY accounts would be a nightmare, but given the short time frame is it worth it even via an accountant??

Apologies for my cluelessness,

Sophie

[GillespieBS]

I'm not sure its worth incorporating a company for 4-5 months only due to the bureaucracy and the cost of formation and dissolving the company whilst still having to perform the year end accounts etc.

I would have thought an umbrella company could be more sensible and you will be allowed to claim the travel expenses to reduce your tax deductions.

You may be able to get an accountant to work out the difference between the 2 scenarios for you.

[gezzagregz]

Hi,

With regards to IR35, the main elements to consider are;

control - Are you supervised? Do you have a say on how to conduct the project?

right to substitution - (you already know)

mutuality of obligation - Are you obligated to do more work once the contract is finished?

Meeting just two elements can take you out of IR35, allowing you to take a dividend from your Limited Company. You could get your contract reviewed, if you are totally unsure of your status.


With regards to it being a short term assignment (4-5 months) it could still well be a profitable way to operate over an Umbrella solution. It will cost you to wind your Ltd Co up when you leave, but like already suggested get a comparison to give you an idea.

I work for a specialist accountancy firm for contractors called Danbro and we provide multiple solutions, so we can give you an idea of the best route you can take. (I won't post our details, but if you google us, we are one of the leaders of contractor solutions).