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Wahoo

IR35

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Any contractors here still operating with Ltd Co ? 

Looks like the changes coming into force in April are going to push a lot of contractors within IR35.

 

Greedy barstewards

 

Are there any advantages in keeping the Ltd option and not taking dividends?

I'm just wondering whether to close the Company and either go under an umbrella or even say '****** it....I'm retiring'.

Any opinions / advice thankfully received.

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1 hour ago, Wahoo said:

Any contractors here still operating with Ltd Co ? 

Looks like the changes coming into force in April are going to push a lot of contractors within IR35.

 

Greedy barstewards

 

Are there any advantages in keeping the Ltd option and not taking dividends?

I'm just wondering whether to close the Company and either go under an umbrella or even say '****** it....I'm retiring'.

Any opinions / advice thankfully received.

It rather depends of you want the other financial and legal protections offered by trading as a ltd company. Most of the tax advantages and the ability to put items such as travel expenses down as deductible costs are disappearing. A lot of IT contractors are looking to jack it in from what I can see. Interestingly one of the areas who might suffer from this situation is HMGs own IT projects which in my experience make extensive use of contractors to plug skills gaps.

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The new dividend tax got rid of most of the advantages leaving it at somewhere around the 10% mark for all the hassle, obviously this is a lot dependant on the rates you can charge. A lot of the technical expertise is within the contract sector as most staff positions and indeed younger staff want management roles for the extra money, this leaves many companies lacking experienced technical people especially in the engineering sector and I imagine the IT one as well.

Over the years I have been treated much better when working as a contractor than when I worked in staff roles and even if it was cash neutral I would probably stick with contracting as bizarrely it allows me to work locally. Staff guys are basically required to work wherever the company wants them to for no extra cash, are expected to work unpaid overtime via credit hours that are effectively unredeamable and only get bills paid crap hotel accomodation.

If I can stay contract I will and will direct as much money a possible into my pension scheme to fill the hole until I retire, money in the company even it it gains no interest is my buffer to cover lack of work or a gradual retirement.

Contracting is psychological freedom, staff jobs feel like indentured slavery.

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1 hour ago, stormymonday_2011 said:

It rather depends of you want the other financial and legal protections offered by trading as a ltd company. Most of the tax advantages and the ability to put items such as travel expenses down as deductible costs are disappearing. A lot of IT contractors are looking to jack it in from what I can see. Interestingly one of the areas who might suffer from this situation is HMGs own IT projects which in my experience make extensive use of contractors to plug skills gaps.

Probably going to backfire for them as they will end up having to back fill with staff from the big consultancies whose charge out rates make contractors look cheap, or worse outsource entire projects to them (in which case the consultancies will in many cases hire contractors outside IR35 so HMRC pay more for the work and still dont get the IR35 tax).

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47 minutes ago, ChewingGrass said:

The new dividend tax got rid of most of the advantages leaving it at somewhere around the 10% mark for all the hassle, obviously this is a lot dependant on the rates you can charge. A lot of the technical expertise is within the contract sector as most staff positions and indeed younger staff want management roles for the extra money, this leaves many companies lacking experienced technical people especially in the engineering sector and I imagine the IT one as well.

Over the years I have been treated much better when working as a contractor than when I worked in staff roles and even if it was cash neutral I would probably stick with contracting as bizarrely it allows me to work locally. Staff guys are basically required to work wherever the company wants them to for no extra cash, are expected to work unpaid overtime via credit hours that are effectively unredeamable and only get bills paid crap hotel accomodation.

If I can stay contract I will and will direct as much money a possible into my pension scheme to fill the hole until I retire, money in the company even it it gains no interest is my buffer to cover lack of work or a gradual retirement.

Contracting is psychological freedom, staff jobs feel like indentured slavery.

Excellent points.

One of the things that makes contracting attractive to some people is the fact they don't have to comply with a lot of the corporate bullsh*t regarding the performance management system etc

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1 minute ago, stormymonday_2011 said:

Excellent points.

One of the things that makes contracting attractive to some people is the fact they don't have to comply with a lot of the corporate bullsh*t regarding the performance management system etc

Exactly, was going to mention that one but couldn't remember what it was called. Have marvelled at how unproductive the system is after watching staff guys going through the motions and taking anything from 2 days to 2 weeks to go through the motions! Place I'm at now does it quarterly on the suckers.

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1 minute ago, choochoo said:

note that it's public sector only for now

I imagine thats where it will stay as the ramifications of it in the private sector are mind bogglingly complicated and full of pitfalls.

In the public sector it will end up pushing more work into the private one and thus further reduce public sector headcount.

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45 minutes ago, mooncat69 said:

They made umbrella effectively worthless last April.

Can you explain please?

I understand that agents won't be able to pay directly into Ltd Co's if employer deems contract as IR35 compliant. So you'd have to use umbrella.....otherwise, how do you get your money?

Always some third party taking your money in this shite hole country.

 

(Or did you mean Ltd effectively worthless last April?)

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15 hours ago, Wahoo said:

Always some third party taking your money in this shite hole country.

 

Try France then, you'll probably have 2 third parties taking your money and then the govt will take the rest.

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How long before they try and do this for non public sector roles ? I think that will be when I close down the ltd and just go umbrella.

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