My client has been told that he is within IR35 so we have advised that he should be paid via an umbrella company going forward.
One umbrella company is proposing a very modest salary of say £20k per annum, and then also dividends, because client's company will buy shares in a networking company and receive a share of profits from there - all which will quite conveniently work out at % of client's invoice to main customer. Apparently the networking company is all above board and people pay subscriptions into it and gain other benefits from it by being a member.
Am I wrong to be hugely suspicious of this? If this all good and above board, does the fact that it does not look or sound like a duck mean that it is still somehow a duck?
Do you think HMRC will be challenging these set ups in due course?
What would you say to your client?