Welcome to another series on IR35. And on this one, we’re going to talk about whether you should go with an umbrella company or whether they should go with your own company and use an accountant.
Hi my name is Gordon D’Silva, and on this IR35 message, we’re going to be talking a little bit about how you make your choices if you are deemed to be inside IR35.
So let’s have a look at the choices.
The first one, suppose there is a choice that you could become an employee of the end client. Most of the time they’re not going to be interested. You could become an employee of the agency. Most of the time they’re not going to be interested.
What they are going to do if you deemed to be in, because they’re going to suggest you go to an umbrella company or something of that nature. Or in your own company, you just get paid net of tax. Okay.
You could go into an umbrella company, the end user through the agencies will pay the umbrella company and gross amounts. They deduct tax and national insurance and their fees and they pay the difference.
Now they also have to include in that holiday pay, sick pay, and everything else, and just remember it all comes out of your money.
They are not going to find the maternity pay out of their money, right. It’s all coming out of your money, so they’re going to have to make some adjustments to make those payments to you.
If for example, you end up in a contract and you end up sick and you get sick pay for, they’re going to take it out of your money and get it to you. So bear that in mind. Okay
So the third alternative, so everyone was one, having an umbrella company is another. The third alternative is to have your own company and use an accountant to run it. And that way I’ve already described in a previous video that you have the next pay going into your company.
That just gets allocated in a certain way to disclose in a certain way. And you have your own accounts, and not way if you have on IR35 contracts and have them in your own company. Still own your own company to do that same. So therein is one benefit is that you’ve got a bit of flexibility.
All your contracts may not be in. If you’re going to have all your contracts in, then clearly you have to decide umbrella or your own company.
So if you have that choice? What do you do?
And if you don’t want the flexibility, what do you do? How do you choose between the two?
And I suppose you could choose at some level. Hassle and you’re going to choose costs. Hassle, you’ve got to decide for yourself how much hassle it is.
Our system makes it super easy. Hands-free, hassle free. Everything is just scan. We just deal with things on a monthly, quarterly, and annual basis and the VAT and dividends are being handled absolutely seamlessly for the contractor, for you.
So the only thing you’ve got left to look at , is how much do these two charge, you know, how much do we charge versus how much do the umbrella company charge.
And I suspect if the hassle value is similar, if you trust them in the same way as running your own company, then it comes down to cost.
If an accountant is way cheaper than the umbrella company, you can choose. Choose to use the company if the umbrella company’s much cheaper, use the umbrella. And that’s really how to make a decision.
Hopefully that helps. This is Gordon D’Silva signing out on another IR35 Vlog.
Take care. God bless you. Bye bye.
