Umbrella Companies for Banking Contractors
There are several specialist umbrella companies for banking contractors. It is quite a highly paid sector.
The umbrella companies allow those working in the banking sector to avoid paying the IR35 tax if they are inside it.
So, how can those contractors who work in Banking and Finance know if they are inside IR35 or not?
IR35 Factors and Test
Well, there are three main IR35 factors which point to you being inside IR35 or not. There are a further nine more minor factors. You can find them all by clicking on IR35 Factors.
There’s also a test that HMRC have come up with to test whether contractors are inside IR35 or outside it.
You can find it at IR35 Employment Status Test.
Staying Outside IR35
The trick is to differentiate yourself from a permanent employee as much as you can if you want to stay outside IR35.
The very best way to stay outside IR35 would be to take the following advice – 18 Tips to Stay Outside IR35.
However, sometimes it is just not possible to stay outside IR35.
This may be for a variety of reasons.
If your agency and your client are not very co-operative when drafting your contract that could hurt you.
So, sometimes contractors just aren’t able to operate through a personal service company. They are unable to incorporate because of the way they work at a particular client.
Choosing an Umbrella Company
So, they must choose an umbrella company.
These companies do all the admin for contractors. All the contractor needs to do is provide timesheets and any claimable expenses and the umbrella company does the rest.
They invoice the client, they deduct tax and National Insurance, they pay the contractor and pay the taxman.
For doing this they charge a monthly fee. However, the contractor would not have to pay an Accountant to produce his end of year accounts.
There are one or two specialist umbrella companies for banking contractors and finance contractors.
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If you do need an umbrella company you could try one of the following:-