IR35? PAYE vs Umbrella Company? Choose Pulse Umbrella
As a Pulse employee you are safe from IR35 and Managed Service Company legislation which is otherwise a risk to contractors who seek to reduce their income tax liability. Whether you are ‘caught’ by IR35 becomes irrelevant because you are paying the right amount of tax from the very beginning.
To truly assess a worker’s IR35 status would need careful consideration. However, if you operate in the following way you are likely not to be “self employed” and are likely to fall under IR35 legislation (i.e. deemed employed).
- you only have one current contract (i.e. you do not have multiple contracts at the same time)
- you travel to the same workplace each day
- you do not provide your own equipment, software or tools
- you are paid by the hour or day
- you work under the day to day management of the client
- you are not financially liable to rectify faults or errors as a result of your work
- you have no right of substitution (i.e. you cannot sub-contract the work and if you cannot go into work that day you cannot send someone in your place)
Visit the HMRC website to check if you are affected by IR35
Our IR35 umbrella company solutions set the highest of standards supporting contractors. We ensure your affairs are dealt with efficiently and effectively, with all administration processed on your behalf. As an employee, all your income will be taxed at source, so you don’t need to worry about IR35, MSC rules, or the stress and cost of running your own company.
Since the April 2007 Budget and the introduction of the Managed Service Company Legislation, IR35 umbrella companies are the only umbrella options available to those inside IR35.
If you use a PAYE umbrella scheme, all your revenue is taxed as though you are an employee, the same as if you were inside IR35. You could in theory use a PAYE umbrella company if you were outside IR35, but for higher earners this would be losing out on tax advantages. For those contractors outside IR35, a limited company is now the most tax efficient route.
Even if your current contract is outside IR35, you should have an understanding of the legislation because your next contract may not be.
