contract employment
- Thread starter xirokx
- Start date
if you go the LTD route then it would be advisable to get an accountant.
I think that your time is restricting you in choice though, it may be best to go umbrella for the first 6 months as you will not get a company registered and an accountants sorted (fully) within 1 day.
Give SJD a call tomorrow though, see what they say, they seemingly have lots of people assigned to many businesses (i think i have 4 assigned to me!).
I think that your time is restricting you in choice though, it may be best to go umbrella for the first 6 months as you will not get a company registered and an accountants sorted (fully) within 1 day.
Give SJD a call tomorrow though, see what they say, they seemingly have lots of people assigned to many businesses (i think i have 4 assigned to me!).
Soldato
- Joined
- 19 Oct 2002
- Posts
- 18,102
- Location
- Shakespeare’s County
More money with an accountant doing the books for your company, thats the situation I am in. They used to be called company management services or something but the budget of 07 killed that off and the whole market changed. It should be easier now aswell as you no longer require a designated secretary.
Speaking to one of the specialists here would be one way to go, particularly if you can make you aware of pay rate and hours they can present several options. Brooksons made it very clear to me, as they do every week with their splendidly transparent pay slips/divident vouchers.
VAT registration on a flat rate scheme (cash counting) means you throw VAT on your hourly rate (17.5%) but HMRC only require 12% or so ( i think im still in the 11% area) in return, so essentially you keep the difference. Money for nothing.
Basically speaking as a ltd company director you pay yourself around £106 a week (no tax but keeps NI ticking over, 13p
) then claim any expenses. The amount left over after this total expenditure is subject to corporation tax of 21%, then you take the rest as a dividend. Obviously any expenses bypass the 21% as they count as an expense not profit.
Alternatively under PAYE your salary is deducted as per a permie and you take the net amount.
Registering and setting up a bank account was complete within 2 weeks for myself. Lots like HSBC as it can allow better transparency between your business account and the accountancy.
Speaking to one of the specialists here would be one way to go, particularly if you can make you aware of pay rate and hours they can present several options. Brooksons made it very clear to me, as they do every week with their splendidly transparent pay slips/divident vouchers.
VAT registration on a flat rate scheme (cash counting) means you throw VAT on your hourly rate (17.5%) but HMRC only require 12% or so ( i think im still in the 11% area) in return, so essentially you keep the difference. Money for nothing.
Basically speaking as a ltd company director you pay yourself around £106 a week (no tax but keeps NI ticking over, 13p
) then claim any expenses. The amount left over after this total expenditure is subject to corporation tax of 21%, then you take the rest as a dividend. Obviously any expenses bypass the 21% as they count as an expense not profit.Alternatively under PAYE your salary is deducted as per a permie and you take the net amount.
Registering and setting up a bank account was complete within 2 weeks for myself. Lots like HSBC as it can allow better transparency between your business account and the accountancy.
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thanks for that guys..
ultimately if you were in my position what would you go for in order to get the maximum amount of net income?
I am now thinking of driving the 47miles each way as for the first 10K I can earn take home close to £600 extra per month according to the calculators which I appreciate are different on each companies site...for 5 weeks that will entail catching the train once a week but then I suppose I can do 1 week per month to average it out even then I can purchase the most expensive rail ticket to bump up my take home
I just dont want mr tax man coming knocking at my door claiming I have not paid the correct amount of tax but of course like anyone I want to take home the maximum amount..
As its my first time contracting a big part of me wants to focus more on the role instead of getting involved with this however I realise this is a big part of the role lol
I would definately love to do this long term hope at the end of the 6 months I get more offers..
ultimately if you were in my position what would you go for in order to get the maximum amount of net income?
I am now thinking of driving the 47miles each way as for the first 10K I can earn take home close to £600 extra per month according to the calculators which I appreciate are different on each companies site...for 5 weeks that will entail catching the train once a week but then I suppose I can do 1 week per month to average it out even then I can purchase the most expensive rail ticket to bump up my take home
I just dont want mr tax man coming knocking at my door claiming I have not paid the correct amount of tax but of course like anyone I want to take home the maximum amount..
As its my first time contracting a big part of me wants to focus more on the role instead of getting involved with this however I realise this is a big part of the role lol
I would definately love to do this long term hope at the end of the 6 months I get more offers..
Soldato
- Joined
- 19 Oct 2002
- Posts
- 18,102
- Location
- Shakespeare’s County
You claim 40p a mile for those miles yes, but that month comes from YOUR company so it will be nothing like £600 a month extra, £20 a week or so by bypassing the tax part, again its an expense, not profit so you claim it direct rather than receiving the cash as a dividend.
First of all whats the payment schedule, if its a month until you get your first paycheque i see no reason not to set up a ltd company.
Can you live for 2 months from now without any income? Then one big bumper payment once you have the mechanism in place?
Umbrella may be a good choice as its only 6 months, plenty of time to get stuff setup in advance regardless what you do and theres nothing really preventing you having a dormant company as far as I'm aware.
After your tax code, its pretty much 21% off for LTD, or 31% for PAYE to come to your net income.
First of all whats the payment schedule, if its a month until you get your first paycheque i see no reason not to set up a ltd company.
Can you live for 2 months from now without any income? Then one big bumper payment once you have the mechanism in place?
Umbrella may be a good choice as its only 6 months, plenty of time to get stuff setup in advance regardless what you do and theres nothing really preventing you having a dormant company as far as I'm aware.
After your tax code, its pretty much 21% off for LTD, or 31% for PAYE to come to your net income.
in light of yesterday posts, I called several umbrella companies today i.e. contract umbrella, 3 sixty , SJD (accountancy firm specialise in LTD companies)
I was told I fall inside IR35...
Trouble is two companies a) 3 sixty and b) contract umbrella calculated my daily rate and there is a difference of £500
3 sixty advised me I could claim £26 a day as I am out of house for over 10hrs a day, CU told me 3 sixty would probably make me sign an indemnity form so if mr tax man comes chasing me I would have to prove I did indeed pay £26 a day or else would be in trouble..
Also CU advised me I should travel by train because the money spent on petrol would be non taxable but then I would have extra vehicle costs at the end of my 6 month contract i.e. vehicle maintenance and parts and stuff so the money I never paid tax on would be taken in other ways..
I am totally confused, I think I have to suggest a umbrella company to my agent A.S.A.P and I start on Monday..
What do I do?
Please help
Cheers
I was told I fall inside IR35...
Trouble is two companies a) 3 sixty and b) contract umbrella calculated my daily rate and there is a difference of £500
3 sixty advised me I could claim £26 a day as I am out of house for over 10hrs a day, CU told me 3 sixty would probably make me sign an indemnity form so if mr tax man comes chasing me I would have to prove I did indeed pay £26 a day or else would be in trouble..
Also CU advised me I should travel by train because the money spent on petrol would be non taxable but then I would have extra vehicle costs at the end of my 6 month contract i.e. vehicle maintenance and parts and stuff so the money I never paid tax on would be taken in other ways..
I am totally confused, I think I have to suggest a umbrella company to my agent A.S.A.P and I start on Monday..
What do I do?
Please help
Cheers
the best option is for me to go sole trader but agency will not allow it...
therefore I have to go umbrella...
Basically what I have been told umbrellas are just as bad no matter which you use , if you get a good one its the best of a bad bunch, you can easily be caught out with them as well....
Umbrellas are merely a smoke screen that try and help you take as much home as possible and which protect the agency in this case...So both agent and umbrellas are safe home and dry..
Its business and everyone wants to earn something and couldnt care what you take home...
therefore I have to go umbrella...
Basically what I have been told umbrellas are just as bad no matter which you use , if you get a good one its the best of a bad bunch, you can easily be caught out with them as well....
Umbrellas are merely a smoke screen that try and help you take as much home as possible and which protect the agency in this case...So both agent and umbrellas are safe home and dry..
Its business and everyone wants to earn something and couldnt care what you take home...
Have a word with Giantstrongbox.
Be warned though, they have some odd rules about Fuel recipts, but over all, ive been with them for 7 years and they have only cocked up my wages once. So not too bad. They sorted it out within 2 days too.
Give them a ring, tell them what your doing, they will give you an estimate of the wage you can expect from them, then check around, take the one thats best.
Let me invite you to Giant and i get £70, will split it with you
<ColiN>
Be warned though, they have some odd rules about Fuel recipts, but over all, ive been with them for 7 years and they have only cocked up my wages once. So not too bad. They sorted it out within 2 days too.
Give them a ring, tell them what your doing, they will give you an estimate of the wage you can expect from them, then check around, take the one thats best.
Let me invite you to Giant and i get £70, will split it with you
<ColiN>
I've just finished my contracting and used atlantic-umbrella for my Umbrella company.
You fax them your timesheets and they raise the invoices with the agency, and as soon as they get paid you get paid.
They have an easy to use web admin system where you can enter your expenses, which then get paid together with your salary.
Be aware that some agencies have a 30 day invoice payment policy which means you could be out of pocket for the first 5-6 weeks or so of your contract (somethign to bear in mind).
The expenses were fair: I drive to work and was able to claim my daily mileage (40p per mile), I was also able to claim £7 per day for lunch (more if I was out more than 10 hours in a day).
Being inside IR35 is a bit of pain quite frankly, but thats something you can renegotiate if your contract is to become extended at a later date.
Good luck!
You fax them your timesheets and they raise the invoices with the agency, and as soon as they get paid you get paid.
They have an easy to use web admin system where you can enter your expenses, which then get paid together with your salary.
Be aware that some agencies have a 30 day invoice payment policy which means you could be out of pocket for the first 5-6 weeks or so of your contract (somethign to bear in mind).
The expenses were fair: I drive to work and was able to claim my daily mileage (40p per mile), I was also able to claim £7 per day for lunch (more if I was out more than 10 hours in a day).
Being inside IR35 is a bit of pain quite frankly, but thats something you can renegotiate if your contract is to become extended at a later date.
Good luck!
They're a friendly bunch, and reply quickly to any queries, so I'm always happy to recommend them.
I've not had the tax man asking about anything, it's all above board and assuming you're honest with your expenses it shouldn't pose a problem.
Oh, I forgot to say earlier but I also managed to put the cost of my Macbook on expenses too (this is deducted from the tax you pay).
I've not had the tax man asking about anything, it's all above board and assuming you're honest with your expenses it shouldn't pose a problem.
Oh, I forgot to say earlier but I also managed to put the cost of my Macbook on expenses too (this is deducted from the tax you pay).
Some expenses don't need receipts: Travel and lunch are just two:
http://www.atlantic-umbrella.com/expense-policy.php
For bigger purchases you'll need to keep receipts though.
http://www.atlantic-umbrella.com/expense-policy.php
For bigger purchases you'll need to keep receipts though.
Soldato
- Joined
- 18 Oct 2002
- Posts
- 5,586
- Location
- Stone, Staffordshire
OK I'm going to wade into this an explain that I work I am employed by an umbrella company, ie not a contractor, well not anymore!.
Anyway, for a six month short term contract I would go for an umbrella. With regards to expense please please please only claim for the amounts you spend. If you can claim up to £x without giving the umbrella companies then only claim what you spend, never claim the flat maximum as your likely to be Hectors first port of call if they probe the expenses policy of your brolly.
Chec out umbrellasupermarket.com for comparisons of different brollies.
Also don't always choose a brolly because of the quoted net return. Some embelish your expenses values to give you a higher return and you'll only be dissapointed.
Make sure you understand these 2 things:
1) You have to pay employers NI as well as employees, at 12.8% it's mad to think that your brolly will pay this.
2) Get your P45 from your previous employer ASAP and submit it to your new brolly. Without this you'll be put on emergency tax and therefore your expectation of return will be dissapointing.
Any direct questions then please ask.
Anyway, for a six month short term contract I would go for an umbrella. With regards to expense please please please only claim for the amounts you spend. If you can claim up to £x without giving the umbrella companies then only claim what you spend, never claim the flat maximum as your likely to be Hectors first port of call if they probe the expenses policy of your brolly.
Chec out umbrellasupermarket.com for comparisons of different brollies.
Also don't always choose a brolly because of the quoted net return. Some embelish your expenses values to give you a higher return and you'll only be dissapointed.
Make sure you understand these 2 things:
1) You have to pay employers NI as well as employees, at 12.8% it's mad to think that your brolly will pay this.
2) Get your P45 from your previous employer ASAP and submit it to your new brolly. Without this you'll be put on emergency tax and therefore your expectation of return will be dissapointing.
Any direct questions then please ask.