Software developer contractor

Use Free Agent; does all of this for you.

You just simply link it to your business account and then explain transactions. Couldnt manage without it tbh
 
redeye_uk said:
Use Free Agent; does all of this for you.

You just simply link it to your business account and then explain transactions. Couldnt manage without it tbh
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U use that on top of an accountant?

i am guessing the Accountant has access to your Free agent account and does all the ammendments for u and u simply can browse and look at the figures yourself and make dividents payments whenever u feel like it?
 
jonneymendoza said:
U use that on top of an accountant?

i am guessing the Accountant has access to your Free agent account and does all the ammendments for u and u simply can browse and look at the figures yourself and make dividents payments whenever u feel like it?
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Kind of.

So i use an accountant called Maslins who are Free Agent (FA) friendly. I pay them £100pm (which includes FA). If I were to switch accountants, which I have recently done, then I can take my FA account with me. Also, being web based, I can access all my company info from almost anywhere in the world

Your accountant will expect you to do the day to day running/input to FA - this includes time sheets, espenses, invoicing etc. They will take care of journal entries (pay roll) and things like that. They will also do a quarterly review and/or help if you are unsure about things.

FA is incredibly powerful software and works out all your tax, submission dates etc. You can submit VAT returns directly to HMRC for example.

It will show you what funds you have available and the best way to pay that to yourself.
 
I am somewhat confused by how you managed to become an LTD, instead of a self-employed sole trader type entity, or self-employed person.
It clearly has great tax benefits, but why do they allow you to, when clearly, a company providing a service with a single employee is in fact a self-employed person?
Whats the difference?
 
Hikari Kisugi said:
I am somewhat confused by how you managed to become an LTD, instead of a self-employed sole trader type entity, or self-employed person.
It clearly has great tax benefits, but why do they allow you to, when clearly, a company providing a service with a single employee is in fact a self-employed person?
Whats the difference?
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Do you care if your plumber is self employed or working through a ltd company? ;)

Also, it benefits the client anyway since they don't have to deal with unfair dismissal or redundancy claims in case you try to sue them claiming you should have employment rights.
 
My company is a business in the same way that a digtal agency is a business.. only they have more employee's. If people want to sub contract work to my company, then I am more than happy to work with them.

One day maybe my company will become a digital agency and will be bidding for 100k+ contracts. In the mean time I am a one man band trying to build a reputation for myself.

I also have clients I do work for in the evenings as well as websites I run. So it's not just like I do a 'day' job
 
redeye_uk said:
I also have clients I do work for in the evenings as well as websites I run. So it's not just like I do a 'day' job
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that would seem to be a good idea... if you've got bits of ad-hoc work for clients running consecutively to the main contract you're involved with at any one time and a few websites generating income then you're seemingly quite legitimately running a business/company and not just using a company structure to avoid tax
 
jonneymendoza said:
i dont believe in pensions. i will manifest my own way of dealing with this in the future.
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This will be your downfall. You can never start early enough to have a pension even if it is just a stakeholder one. As a contractor, that's the least you should be paying into. The average retirement age is already now 67. :(

I have a close friend who has no pension, in fact, he has no provision for his family at all. His father / mother were the same relying on poor property based decisions to see themselves survive through retirement. This is not how to live.
 
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Bear said:
Sorry I thought you were trying to be funny saying "expense to the extreme" implying we were taking the mick to reduce the tax burden.
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You must have missed my post where I said I was a newish contractor and I wanted to know the best way to make the most money. For what its worth, it probably is a form of tax avoidance, but I wouldn't really feel too bad about that when millionaire MPs wealths often come from a lot more heavily suspects forms of avoidance.

Bear said:
SNo there isnt a higher tax burden on a Ltd co compared with an umbrella, it is potentially lower or be virtually the same, it all hinges on IR35. If you are captured by IR35 then, the difference between umbrella and Ltd makes next to no difference on your income.

If you are outside of IR35 then you will be better off financially. Currently under an umbrella you pay:

Corporation tax, employers NI, income tax and employees NI

Under Ltd you can pay exactly the same or you can choose to pay yourself a small salary around your tax free threshold and pay yourself dividends. Dividends are taxed differently, up to the higher rate tax threshold, dividends are taxed at 10% BUT on dividends you get a 10% tax credit which makes the tax payable under higher rate tax £0. Once you go over the higher rate tax threshold the tax on divs goes up to 35% but with the 10% credit, you pay 25% or if you have a wife, you can make her a shareholder and use her tax allowance, so both you and your wife could earn approx £43k each and not pay any income tax.

Also due to the small salary, if you pay the right amount you will barely have to pay any NI, you will pay a bit to qualify for the state pension etc. If you also register for flat rate VAT, you get to keep a portion of that VAT you charge the client. So under ltd co you would pay:

VAT, Corporation tax, tiny amount of NI, and income tax above approx £43k or in reality you can juggle the salary to what ever you want so long as you pay the appropriate taxes to compensate.

I hope that makes sense, if not then there is more than enough information on the internet with the relevant calculators etc.
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Thanks for that. Its useful info, most of what I already was sorta aware of, but in reality I don't actually know anything for sure. I plan to walk this road in the near future though, assuming work doesn't dry up.
 
Lucero said:
This will be your downfall. You can never start early enough to have a pension even if it is just a stakeholder one. As a contractor, that's the least you should be paying into. The average retirement age is already now 67. :(

I have a close friend who has no pension, in fact, he has no provision for his family at all. His father / mother were the same relying on poor property based decisions to see themselves survive through retirement. This is not how to live.
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Pensions are a rip off and wont be enough to live on.
 
Starting my first contract either on the 21st or up to 4 weeks from yesterday, depending on how fast I can get out of my current job (leaving the Army).

I have my ltd company set up, I'm VAT registered, I have a business account etc. I was going to take the liability insurance just before I start.

My question:

Get an accountant now, or wait till I know the start date? I'm going with SJD.
 
MilanoChris said:
Starting my first contract either on the 21st or up to 4 weeks from yesterday, depending on how fast I can get out of my current job (leaving the Army).

I have my ltd company set up, I'm VAT registered, I have a business account etc. I was going to take the liability insurance just before I start.

My question:

Get an accountant now, or wait till I know the start date? I'm going with SJD.
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im going http://www.sjdaccountancy.com/ too.

Yes u can get an accountant now. where did u create your ltd?
 
Well it has been know for a while how pensions are a rip off and cant live on them. Now unless its changed or is different when using a company pension then i am all ears
 
Morning chaps, I work for Crunch. Ran across this and thought I'd just address some of the stuff being discussed.

redeye_uk said:
They use propriaty software which is rubbish,
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We actually develop our own software which isn't all that dissimilar from Free Agent. Because we develop the software and are an accountancy firm we can do some cool stuff that other software providers can't (e.g. automatic checking and filing of VAT returns online).

redeye_uk said:
...never respond to correspondence...
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We have a target turnaround time of four hours to respond to any query we get from a client, and we respond to everything we get.

redeye_uk said:
...and offer poor advice. I'd bet the 'personal accountant' isnt qualified in any way.
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Like any firm our accountants vary in qualifications; we have a handful of AAT apprentices, some part-qualified accountants, all the way up to our Chief Accountant who worked for HMRC for 20 years. We're accredited by the PCG, AAT and soon the ACCA, so we're beholden to certain standard of training and customer care.

redeye_uk said:
Not to mention the hassle they give you when you decide you want to change accountants.
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We don't have any exit fees or tie-in - if you want to leave we'll just give you an export of all your data and send you on your way.

redeye_uk said:
They aren't [chartered] accountants and probably have some pleb dealing with enquiries.
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We actually have a whole team of highly-trained plebs who deal with enquiries - every client has their own account manager + admin who looks after them.

I don't know if you've had a bad experience with us in the past but I think you're misrepresenting Crunch quite a bit here. We're a proper, no-messing-about accountancy firm. We spend a small fortune on developing our software and training our staff, and we've got more-or-less the highest customer satisfaction and retention rates in the business.

Can't speak for PayStream of course - they may well be scumbags.
 
jonneymendoza said:
Pensions are a rip off and wont be enough to live on.
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Seriously? You're even more deluded than I first thought. You need a pension, full stop. Property is now unreliable. It's better to have many pots or one very good large one. I've worked for the last 4 years on a AVC scheme which is matched by my employer. Within that time, my pension pot is already over £50k. Nowhere near enough to live on at retirement, but then I have another 25-30 years of work left. I also have two stakeholder pensions which I've had running for the last 10 years. Then there's the ever awesome state pension :p
 
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Also, just read the whole thread. I have been warned about taking dividends on a regular (eg monthly) basis, as this can be seen as taking a 'wage' by HMRC (think IR35!). I've been told to take irregular amounts at irregular intervals.

I will of course seek the advice of my accountant when I get it set up finally and I would strongly urge those contractors in this thread to do the same. Of course I could be wrong, however this is the advice of around 12 IT contractors I've met over the years since 2008 (the year I decided contracting is for me).
 
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