Umbrella Company and IR35 Solutions, Yorkshire UK

Solutions Tailored to your Needs

Sigma specializes in proving services for contractors from a variety of industries including IT, Accountancy, Engineering and much more. You will get a full range of limited company services (including IR35 solutions) and peace of mind that Chartered Accountants & Chartered Tax advisors are looking after your financial & taxation affairs. Please read the information on this page and contact us if you have any further questions. If you choose Sigma and require a limited company to be set up, we will offer you a 25% discount on our company formation fees (please see home page for details). We will also offer you a one off 25% discount on your monthly fees for each new contactor you introduce.

What is IR35?

The Basics
In brief, IR35 was introduced by the government in April 2000 for the purpose of removing opportunities for the avoidance of PAYE tax and National Insurance Contributions by the use of intermediaries. The end result is that contractors would not be able to extract dividends from their companies and are liable to increased levels of national insurance payments (For more information on IR35, please go to the (Inland Revenue’s IR35 Page). The Professional Contractors Group (PCG) is pressing the government for details of the cost and efficiency of IR35 investigations carried out by HM Revenue & Customs. Recent figures revealed that less than one per cent of contractors investigated fell foul of IR35.

Is mY contract caught by IR35?
Sigma will be happy to review your contract and provide an opinion as to whether you fall inside or outside IR35. There is a small fee for this service. With an increasing number of IR35 cases going to court, we keep a close eye on the judgments made. This enables us to give you a very reliable opinion as to what constitutes an IR35 complaint contract and offer numerous IR35 solutions to our clients.

Assuming you are not caught by IR35, we recommend that you set up a limited company and pay yourself a minimum salary. The rest of the income within your company can be distributed through a combination of Director’s expenses and dividends. This route will be extremely tax efficient and Sigma’s expertise in tax planning will enable you to maximize your earnings.

Solutions for Contracts Caught by IR35

Umbrella services
If your income falls inside IR35 then do not despair. Sigma offers an Umbrella company service which could help you increase your net income and is one of the most powerful IR35 solutions available. This will involve less administration that the limited company route mentioned above and you will effectively become an employee of our Umbrella Company. The increased take home pay is thanks to a very generous dispensation which Sigma has arranged with HM Revenue & Customs.

Our Umbrella Company will issue an invoice on your behalf directly to your client or recruitment agencies. We will then pay you a net salary after tax, National Insurance contributions and all fees.

Even if you fall outside IR35, you may prefer our Umbrella Company route if you are not a long term contractor as no limited company will be required and as mentioned above the administration burden is reduced. Companies offering IR35 solutions are common these days, however it is important that you choose reputable firms who are members of professional accountancy & taxation institutes to ensure you are getting the best possible service.

Composite Companies
You may have heard of Umbrella services being offered through composite companies. Sigma strongly advises against this practice as they usually pay no regard to IR35. Although benefits are offered such as those we have mentioned by contracts outside IR35 (eg: Payment of dividends etc), the fines and penalties which may ensue as a result of a HM Revenue & Customs enquiry could potentially be financially ruinous. Although some composite companies offer indemnity insurance against such investigations, an investigation can be launched up to eight years after the tax year in which the income arose at which time you may not be covered. In addition to this it is unlikely that such insurance will cover you fully against legal fees, accountancy fees, fines, penalties, surcharges, interest etc. The most important point however is that no form of insurance can protect you from a potential criminal record (tax evasion being a criminal offence) and a “Black listing” with HM Revenue & Customs. Our Umbrella services are simple, safe & value for money.

Bookkeeping

How do i complete my book Keeping?
Sigma appreciates that you are a busy person which is why we have devised a user friendly spreadsheet which can be used to complete all of your book keeping. This should take no longer than 20 minutes per month to complete.

What Else?

What else do i get
We are not just here to compute your tax liabilities. We will give you valuable advice throughout the year on how to efficiently run your new company and will help you on issues such as collecting debts, negotiating better rates with your agent, optimum timing of dividend extraction and much more.

Please note:

The content of this page is for information purposes only and detail within it has been simplified. It has been based on tax legislation in operation at the time of publication, which may subsequently have changed. Whilst every care has been taken in its production, Sigma cannot accept responsibility for any action undertaken or refrained from as a consequence of this material. Specialist advice should be sought from a Chartered Accountant/Chartered Tax Advisor in relation to an individual’s financial matters.