With April quickly approaching and the proposed IR35 changes to private sector contracts set to come into force, we\u2019re continuing to delve deeper into IR35 and the potential implications it will have on contractors.\r\n\r\nOur \u2018IR35 Survival Guide\u2019 addresses lots of points, but we thought we\u2019d cover what your options are if your contract is caught by IR35.\r\nGet professional advice\r\nIf your end-client determines that your contract is \u2018inside\u2019 IR35, firstly, don\u2019t panic. Speak to your accountant for their professional opinion - they may be able to help you with evidence to prove otherwise. With the responsibility for making the IR35 determination moving from the contractor to the client in April 2020, you will need to persuade your client to change their mind if you are to continue outside IR35.\r\nIf your client\u2019s final determination is that your contract is inside IR35, you have a number of options available to you:\r\nWork through an umbrella company\r\nSome contractors opt to work on the contract through an umbrella company. Effectively, you become an employee of the umbrella company, and as such they take care of invoicing the client and calculating and deducting the appropriate taxes. Plus, as an \u2018employee\u2019 you are entitled to employee benefits, such as sick pay and annual leave.\r\nHowever, the benefits of engaging an umbrella company do have a cost attached \u2013 your take home pay may be 20% to 30% less than what you usually receive.\r\nYou need to question whether you can pocket this drop in income, or if there\u2019s scope to increase your fee to cover the loss.\r\nContinue to work through your limited company\r\nSome contractors are surprised to find that they can operate through their limited company when the contract is inside IR35. And, there are some advantages to doing so.\r\nFor example, if you have the capacity to take on other contracts, some of which are outside of IR35, you\u2019re already set up to work on these contracts. Plus, you\u2019ll only have to deal with the running of your limited company and won\u2019t have the additional task of liaising with an umbrella company.\r\nFees an umbrella company charge can be on-par with accountant\u2019s fees. And, some umbrella firms take a percentage of the contract\u2019s value. These additional charges are something to bear in mind if you choose to keep your limited company running while working through an umbrella company, unless you work with an Accountant such as SG where an umbrella solution is included at no extra charge.\r\nDue to HMRC providing a 5% allowance to cover the running of a limited company, you\u2019ll pay tax on 95% of your income, compared to 100% via an umbrella company. This is certainly true at the time of writing, but may or may not be reviewed in April 2020.\r\nWalk-away from the contract or go permanent\r\nNo-one wants to turn down a lucrative contract, but if you decide that the conditions attached to the contract are unworkable, it may be better to reject it or look for permanent employment, instead of placing yourself in a situation where you could potentially lose money.\r\n\r\nIf you\u2019re concerned how the proposed private sector IR35 reforms will impact you, speak to one of our Directors on 01962 867550, or send us a message and we can arrange a convenient time to discuss them in greater detail. Or download your free IR35 survival guide now.