contract employment

xirokx

xirokx

xirokx

Soldato
Joined
2 Oct 2004
Posts
4,362
Location
N.W London
Hi,

Just found out I landed a 6 month contract role.

I have been advised to use an "umbrella company" or a "ltd company" who can do all my tax etc..

I have been recommended three companies, one company advised me they would charge £54 a month admin fee and take no additional monies from my salary...

I have never contracted before so wondered if anyone knew anything about this?

For example can I claim 100% public transport costs? what other costs can I reclaim and what percentage will I be reimbursed? Also what rate of tax do I pay on my salary?

All help would be appreciated..

Thanks
 
if you are going to be earning a good wedge then its much better to go LTD company (unless you use one of the IOM umbrellas, which is not a good idea atm), take a look at SJD Accountancy's website, they are very prominent in the contractor market, they do a good comparison guide and have lots of useful info for people who are unsure which route to take.

also worth taking a look at contractorUK and professional contractors group.

welcome to the world of contracting :D
 
Another vote for SJD.

I've gone Ltd since i expect to be doing this for some time, but if you think this may be a one off contract then maybe an umbrella is better.
 
I went with a company called focusedconsulting, not bad, did what they had to do, but their website was shocking, and the amount of support/info they had was virtually non existent!
 
Stolly said:
Another vote for SJD.

I've gone Ltd since i expect to be doing this for some time, but if you think this may be a one off contract then maybe an umbrella is better.
Click to expand...

Thats a good point.
Its worth considering the cost to setup the company and then the potential corp tax and other outgoings to the amount an umbrella will take.
 
well the role is only 6 months at this stage so I will go with umbrella and I believe I can contract using an umbrella company for upto 24 months before switching to Ltd company..

that said, I would like to know if I can claim 100% public transport costs back? Even if they are "non chargeable"

I hope I can get contract roles in future, this is my first one :)
 
I think it depends on what the company contract states in regards to expenses.

Where I was, getting to and from work I wasn't allowed to claime public transport/petrol as it was getting to and from work, but if my job needed me to go elsewhere they would pay public transport costs.
 
xirokx said:
well the role is only 6 months at this stage so I will go with umbrella and I believe I can contract using an umbrella company for upto 24 months before switching to Ltd company..

that said, I would like to know if I can claim 100% public transport costs back? Even if they are "non chargeable"

I hope I can get contract roles in future, this is my first one :)
Click to expand...

Dunno about under an brolly, but the Ltd way means that i claim back expenses such as travel from my Ltd. So its all my money anyway but it does mean that you don't get taxed on it. So if i spend £1000 a month on train fares then its £1000 tax free.

Best thing really is to drive there since you can claim the first 10k miles at 40-odd pence a mile. Nice little earner that one.
 
is there a website that calculates transports costs and tells you how much tickets are?

Im so crap with public transport I have never ever had to use it...unless the car broke down..

I dont think I should go down the LTD company route because its my first contract role and its only for 6 months at the moment...

I read on Contract umbrella you can claim your travel costs...hmm
 
xirokx said:
is there a website that calculates transports costs and tells you how much tickets are?

Im so crap with public transport I have never ever had to use it...unless the car broke down..

I dont think I should go down the LTD company route because its my first contract role and its only for 6 months at the moment...

I read on Contract umbrella you can claim your travel costs...hmm
Click to expand...

you claim them via the umbrella company as tax relief, not to dissimilar from a LTD.
you dont claim them directly back unless your contract states you can.

my first contract was only 6 months, was extended for another 6 months recently.
for me the difference in umbrella and LTD was near on £15k, needless to say I went for the LTD route ;]
 
I just got extended for another 3 months as well. There are contractors at this place that have been there for over 2 years. I've had permie roles last less time than that.
 
Stolly said:
I just got extended for another 3 months as well. There are contractors at this place that have been there for over 2 years. I've had permie roles last less time than that.
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yeah, bloke opposite me has been in this place for nearly 7 years, longer than most of the perm staff :D
 
Im with Brookson accounting services with my own limited company. £1200 a year ish for thier services, which includes them having a connect link my business bank so they know whats happening. The complete the all my VAT returns and expense claims, informing me of the the dividend amount each week and releasing the monies direct to my personal account along with an text message telling me how much. They also raise the invoices to my agent which requires only an email covering my weekly hours. Very hassle free. Just make sure they will do an IR35 compliance check of your contract and review it regularly, this is something important to cover.

If you are commited to long term contracting with ltd company and will be a director for several assignments then there is no issue with claiming travel expenses to your assignment work place (for the first 24months). Works out well at 40p a mile to 'clean' off some of your profits that are then subject to coporation tax.
 
is it worth setting up a LTD company for a 6 months role? How much does it cost to setup a ltd company?

Whats better umbrella or ltd?

I havent even seen my contract and start monday lol, I just dont want to pay too much tax and claim back as much as possible..

Also the drive is 47miles each way...

So under a LTD company if I am the director then I can claim back 100% travel but cannot under umbrella if my contracts does not include it? Please clarify

thank you so much for all your help
 
I do 58 miles each way and clear (iirc) a whisker over 1k a month tax free for mileage. Its only the first 10k though then it drops to 21p a mile. At that point i'll be looking for another role close to home.
 
xirokx said:
is it worth setting up a LTD company for a 6 months role? How much does it cost to setup a ltd company?

Whats better umbrella or ltd?

I havent even seen my contract and start monday lol, I just dont want to pay too much tax and claim back as much as possible..

Also the drive is 47miles each way...

So under a LTD company if I am the director then I can claim back 100% travel but cannot under umbrella if my contracts does not include it? Please clarify

thank you so much for all your help
Click to expand...

I paid £45 to set up my ltd company and it gets me about £150 a week extra than a PAYE under an umbrella. So yes, its worth it. You wont be able to get paid until you have an incorporated ltd company and a related business account to pay it into. So decides quick, you can change things around I imagine with negotiation or simply let the agency hold onto the cash whilst everything is setup.

You can claim travel expenses under either if you plan a long term affair.

A six month contract at one place as a your only assignment will be frowned upon by HMRC and could land you in trouble with regard to your travel expense claims. Anything you put through your business, ie PC, laptop etc is not covered by personal possession house insurance. There pretty much the basics Id cover now, best to look on a formal site as suggested.

Its a bit of a leap of faith but it was remarkably hassle free. Just make sure you invoice your agent as soon as the hours are submitted on your timesheet and famaliarise yourself fully with their pay schedules ie. im fortnightly and have to make sure my timesheet is approved every other Tuesday to prevent delays along with an invoice submitted.
 
on top of the £45 to setup a LTD company what other fees do you pay?

is 6 months a long term affair ;)

thanks for the invoice advice
 
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