UK has some misc panic around IR35 still.
I found companies were much more willing to be invoiced by a limited company than by an individual, though setting up and maintaining that company is a hassle.
I found companies were much more willing to be invoiced by a limited company than by an individual, though setting up and maintaining that company is a hassle.
It costs £12 and takes about 20min to create. Then you get a bank account with startling/monzo which is very simple (easier than high st banks). All tax is done online which again is fairly simple. Sign up for freeagent (or another accounting package) and just keep on top of your accounts. When it comes to filing your annual accounts and confirmation statement, again its all incredibly simple and can be done yourself without the need for an accountant as you'll qualify for mico-entity accounts and freeagent handles it for you. Or you can pay roughly £1200-£1500/yr to an accountant and have them do it for you.
Its honestly not hard at all, happy to answer anyones questions on the matter.
Any half decent accountant will probably be able to SAVE you more than this; mainly by optimising your tax affairs (assuming you have a modest turnover).
It's money well spent.
https://www.brooksonfaq.co.uk/knowledge-base/what-are-the-ir...
It's obviously a minefield, especially substitution. If you're being hired for specific niche in-demand skills, why should you be expected to provide someone else?
What seems to happen in practice is the Revenue occasionally has a spasm and decided to investigate a selection of freelancers. This ends with a lot of confusion, plus various tribunals and court cases, because the reality is not clear and many freelance situations can be argued either way.
The simplest option - not infallible, but very helpful - is to have multiple clients and work mostly from home on fairly short projects. That makes it very hard to argue that you're an employee.
If you're on-prem and exclusive for an extended period for a set number of hours, supervised by management and using equipment supplied by the employer, it gets much harder to convince a court that you're genuinely freelancing.
Even if they're determined to keep IR35 the government could at least clarify their intent for people like contractors who work with a single client but for a limited time. Right now I have the sense from my own network that there are a lot of games being played in that sector to try and avoid being caught by IR35 because no-one really knows if they're supposed to be. If the government wants to charge people who are working as flexible labour through a PSC the same taxes as permanent employees then they should at least be honest about it and accept responsibility if that flexible workforce then shrinks and economic damage results. Or if they want to incentivise the flexible workforce then they should give clear guidance on how long is considered to still be "temporary" and won't be treated as disguised employment (even though the "employee" probably lacks any of the job security and benefits of a real employee as most contractors do) to remove the risk for many genuine short-term workers and increase the efficiency of the contracting market.
However, if you've ran the company in previous years, even if you've taken a year off and had 0 incoming revenue, you may have other taxes to pay. There wouldnt be any corporation tax as theres no profit, but you may have some very small expenses like bank fees, maintenance of servers, subscriptions, etc that might be left over. So you wouldnt be dormant, you'd be a loss making company, but still active.
If you had a big chunk of money in the biz bank account and still paid yourself, there would be taxes on that, both on the company and personal side depending on how you paid yourself.
I wouldnt recommend setting up a Ltd company to literally do nothing with it though, 0 revenue and 0 expenses, you're not really benefitting for any reason.
You still have to file accounts even if that's just one page of "income 0 outgoing 0", for which there is a charge of £13. https://informi.co.uk/business-administration/filing-your-an...
If they contract with a freelancer directly, and that freelancer has no other gigs, then the freelancer will be considered as another employee for tax, benefits and liability purposes.
If they contract a freelancer from a consulting company, the consulting company takes the employment burden.
You can get around this by creating your own company, but there are lots of complications for it.
I'm not sure if they still exist (been a while since I did this) but you used to be able to join an "umbrella company"[0] which was set up and managed by an accountancy firm and employed a small number of contractors/freelancers, which worked well.