Tax advice needed - any accountants here?

[NobleLord]

Hi All,

I need a little advice from someone who understands the tax system and accountancy.

For obvious reasons, I won't post all the details on a public forum, but the basic question is this; Am I better off staying on PAYE with my current employer or becoming a self-employed contractor to the same firm? I earn a healthy basic salary and have the ability to earn a lot of commission from partnership deals. I want to work with some trusted business development people in countries where I have no experience to secure new partnerships for the business. In the event of a new win, I want to share some of my commission with them on an ongoing basis.

My employer supports this idea, but won't have a direct relationship with these 3rd parties and has suggested that I make arrangements to do whatever I want with my commission payments. Now, handing over brown envelopes each month is neither legal or logistically easy. My employer has suggested that I could become a contractor under the same terms as my full-time employment (notice period, pay, etc) and then pay these other people legally as agents/staff.

I need to get some advice from someone that fully understands the tax implications on both me and the people I'd be paying. I don't want to just jump out of a good PAYE role to find that I've disadvantaged myself for the sake of achieving this.

I guess there may be some advantages to doing this as I can write off things against tax that I can't at the moment, therefore, my 'take home' pay might actually me more under this new arrangement.

If you can help, please PM me.

Thanks,
NL

[Eric Mc]

You have mail.

[BoxheadTim]

The one thing that sets off very loud alarm bells straight away is that you're thinking about switching for perm to contract with the same employer. That's more or less exactly what IR35 was designed to prevent so chances are that you will fall under IR35 which makes the whole contract thing pretty much a moot point unless there are other incentives.

[Eric Mc]

BoxheadTim said:

The one thing that sets off very loud alarm bells straight away is that you're thinking about switching for perm to contract with the same employer. That's more or less exactly what IR35 was designed to prevent so chances are that you will fall under IR35 which makes the whole contract thing pretty much a moot point unless there are other incentives.

IR35 will only come into the frame if the contractor choses or is forced to operate through an "intermediary" i.e. a limited company or partnership. If he stays as an individual there are other factors to be wary of.