HSMP visa holder working as a Contractor

[baba1]

Hi there,

I am a staff employee at the moment but I need to work as a contractor as this will give me more money and flexibility. Does anyone have any idea how to manage the salary and tax mean how much money I need to show as PAYE and rest as dividends etc.

Cheers,

[SpiderKing]

Do you have Limited company registered?

Do you know about IR35. I would suggest takes help of unmbrella company.

Otherwise you would be cought by IR35 and ending up with huge fine.

Regards
SK

[John]

you would be caught by IR35 and ending up with huge fine.

As a UK Tax Consultant I think that is far too much of a sweeping statement. I would not go as far as saying that IR35 is a voluntary tax but with proper planning and well-written contracts in place, it is often in practice almost like a voluntary tax.

Can a HSMP visa holder become such a contractor? Nothing in their visa conditions to stop that. They can work for anyone and that includes a company in which they happen to own shares.

Note however that those here on Work Permits, well the WP permits them to work only for a specific employer and thus it is not possible to change employer in the same way.

[rella]

John,

We will be setting up our company in the UK. My question is how do you get an NI number initially, when you don't work for anyone or never have in the UK? My husband (who has the HSMP) will be making the bulk of the income, but I'm working too for our company and will be drawing some salary. So, I'm confused about how to get your NI number, so we can start paying taxes once we set up.

Thanks.

[John]

As a general concept, after you start work in the UK .... and that includes working for a company in which you and/or your spouse happen to own all the shares ..... contact your nearest Job Centre Plus office and make an appointment to get a NINO .... National Insurance number.

[rella]

Thanks. Will do.

[SpiderKing]

Well, As per my knowledge. You can do that if you are true consultant. Meaning if you are working for more than one client.

If you are working for single client for long period then you might be having problem with tax.

regards
SK

you would be caught by IR35 and ending up with huge fine.

As a UK Tax Consultant I think that is far too much of a sweeping statement. I would not go as far as saying that IR35 is a voluntary tax but with proper planning and well-written contracts in place, it is often in practice almost like a voluntary tax.

Can a HSMP visa holder become such a contractor? Nothing in their visa conditions to stop that. They can work for anyone and that includes a company in which they happen to own shares.

Note however that those here on Work Permits, well the WP permits them to work only for a specific employer and thus it is not possible to change employer in the same way.

[John]

I agree but would add this. There are contracts out there that make the job of HMRC easy! And there are contracts out there that make their life very much more difficult!

Now given that they have got finite resources to chase taxpayers, guess which group they are going to go after first .... to maximise the tax they collect?