Employment Status

Are you a contractor? If you work for someone else, it is important to know whether you are working for that person in an employed capacity or in a self-employed capacity as an independent contractor.

Your employment status will determine the charge to tax on income from your employment or self-employment. It will also determine the class of NICs, which are to be paid.

Umbrella Companies employ you for tax purposes and complete central returns for all their contractors. It's less hassle and more flexible for you but take home pay is typically less than that the limited company option.

The best option for you depends on your plans, 'one off' contract or 'contractor for life'? [Read More...]

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IR35 and Legal Expenses Insurance Cover

IR35 and Legal Expenses Insurance

Is it worth it? Well, you can run any type of insurance if there's someone willing to pay the premiums....

IR35 and legal expenses insurance policy is designed to take away the stress and worry of a taxation or legal action being taken against their contractor limited company.

How Much is Legal Expenses Insurance?

Such an insurance policy will cost around £100 a year. Given that you should be aware whether or not your contract assignment is caught by IR35 before you accept the job, it is debateable whether this particular insurance represents value for money.

What Do You Get Legal Expenses Insurance Cover?

Your IR35 insurance premium will buy you around £100,000 worth of legal expenses cover. In general, this will give you;

  • Accountancy fees to represent you in a full and/or aspect enquiry by HMRC
  • A dedicated telephone service set up specifically for advice in respect of IR35 matters
  • A legal advice line on UK and European law
  • Legal costs for defence and appeals in respect of criminal proceedings for you and your employees
  • Legal costs for civil proceedings for employees
  • Legal costs and expenses for representation and defence proceedings brought under the Data Protection Act.
  • Legal costs and expenses in defending actions brought by employees and ex-employees under employment legislation.

At worst, this insurance product may buy you peace of mind.

What is Your IR35 Status?

You can see if you fall Inside or Outside of IR35 using the IR35 Status Calculator

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HMRC Compliance

It's the basics... Compliance with Tax, VAT, PAYE and fiscal arrangements is mandatory for contractors regardless of whether you use an umbrella company or your own limited company.

Incredible then that there are still rogue umbrella companies and limited company accountants who expose their contractors to fraud. Umbrella Compare provides THE solution, we thoroughly vet all umbrella companies and limited company accountants that we list [Read more...].

Umbrella Compare provides a holistic overview of contracting with the aim of helping new and old contractors find the right payroll solutions. Contracting should be about focusing on the contract, not payroll, accounting, HMRC and bureaucracy.