In the past, many individuals have undertaken contract work through their own limited company. Following recent changes to the IR35 legislation that is crucial to such arrangements, we have seen a number of our clients encounter difficulties continuing on this basis, with alternatives of PAYE based work being offered, or contracts through an umbrella company.
HMRC have recently published a guide about working through an umbrella company. It covers the following:
Who will pay you
How you get paid
What you get paid
How to understand your pay
Tax avoidance
The guide can be accessed at the following link:
Whilst this subject very much crosses the boundary into the remit of an accountant, there are a number of Financial Planning issues that also need to be considered, for example:
Effect on remuneration strategy
Forecasting of future taxable income
Current pension funding arrangements
Availability of employer pension contributions
Current protection arrangements for death and serious illness
Availability of employee benefits
You may also find our article on HMRC's IR35 Flowchart for end clients helpful, which you can find here.
If you are affected by the issues here and would like to discuss how it might impact upon your Financial Planning arrangements, please do get in touch.
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Please refer to our Legal Declarations page.