The UK government is all set to roll out the changes to off-payroll working rules (also known as ‘IR35’) in April 2021. And contractors working through their own limited company (or Personal Service Company) will be the most affected since they will no more be deciding their own employment status instead it will rest in the hands of the end-client.
While contractors working via a Personal Service Company are reviewing their employment options, contracting under an Umbrella company can be a wise option to consider. However, contractors do have the option to work as an employee of an Umbrella, the question that arises here is whether they'll have to close their Limited Company or can they work through both Limited as well as Umbrella.
Here’s what you can do in that case:
Work on a mixture of assignments
IR35 applies to each assignment and not to the Limited Company. And while you are working with a number of assignments out of which a few may be inside the IR35 and a few outside IR35, you may have a way out which doesn’t involve shutting down your Limited company.For assignments that fall under the IR35, contractors can use their Limited company through PAYE and opt for tax and National Insurance (NI) deductions. However, if they don’t wish to work ‘inside IR35’ contracts via their Limited company, in that case they can use an Umbrella company such as Reliasys.
Working with us essentially means you become an employee of our company & are paid on a PAYE basis.
Advantages of keeping your Limited Company Operational:
If you have your Limited Company operational, you can continue enjoying the benefits of operating via your limited company which also includes an expenses allowance. Also with your Limited company being operational means that you have the flexibility to choose projects according to your needs which further means that you can set your fees and work hours by yourself.
Moreover, there’s still time for the rollout of the reforms to the off-payroll working rules and until April 2021 you can continue to work under your Limited Company as you are entitled to a 5% tax allowance.
Important Note: However, you need to know that the allowance isn’t applicable in your contract if it is deemed to be inside IR35 by your public sector clients.
In case you need our help, we can help you either continue as a limited company contractor, move to an Umbrella contractor, or we can even do a better one and offer you with a combination of both.
Feel free to contact us at:
Phone: 020 3500 2615