Are any of you self employed and/or have set up a Ltd coampany? need advice..........

I'm a Architectural Tecnician by trade, not to keen on my current role but pretty good on the old CAD system....... a mate of mine has his own company! he wants me to come and work for him but as a freelance employee. He says this will both benefit him and me finacially..... i.e. he doesn't have to pay etra costs for isnurances etc.... I would benefit as I would be paid by the hour and if I set up as a Ltd company can do the standard tax fiddle, thus paying less in tax.... something to do with IR35 what ever that is?????

Not to clued up on it all to be honest! I have done the ltd company thing a few years ago but it was all set up and managed by the agency. Is there much risk involved, with this tax fiddle? It all sounds fairly dodgy but many people do it.......

please advise

 

You should be ok as long as you invoice him for your services. That way you can receive a gross payment from your mate, and you then pay a percentage of your wage to the lovely tax people. I do certain jobs for my brother-in-law and that's how we do things now. The thing with being a Ltd Company is that you have to check each employee that you set on by contacting the Inland Revenue and they confirm how they should be paid (PAYE, CIS or a gross payment)

 

johnny try a company call no longer ltd - search on google - they'll let you know if you are eligible for benefits which you get outside of ir35. i work through them and get 85% of invoiced amount. If you like what you see drop me a PM and there free stuff for both if you mention my name.

 

People going down that way is something HMRC are trying to stop. They argue that the substance of any business relationship is more important than the legal form, therefore if you appear to them to be an employee (work for the same company/person all the time, get holiday pay, get sick pay, represent yourself as an employee of the company to customers etc) you will be treated as one - of course thats only if they decide to look at your situation.

 

"The standard tax fiddle"

If you mean paying a small salary and large dividend then I'd be very careful if I were you. The revenue are getting hotter on this kind of thing, hence their appealing of the section 660 defeat to Arctic Solutions, and if the payment structure of the company is deemed to be unreasonable you might be storing up problems for down the line. The corporation tax changes, such as the loss of the 10k exemption, also make this less attractive. I operate as a limited company and it's very useful for structuring payments, such as smoothing income out to cover periods of lounging around drinking wine, but I'm very careful to ensure that I could put my hand on my heart and say that it was all by the book. For example, I never pay out more in dividends than in salary in any given year.

That said, I'd rather be limited than employed on the side by a mate's limited company. That sounds like the worst of both worlds to me, no offence to you or your mate intended. You'd have to check out the deal with SIC codes and stuff if his business is much different to yours, too.

And as for IR35, I operate outside of it, by turning such work down if necessary, and if you can do the same then it's well worth looking into further. I resigned my membership of the Labour party over that particularly shortsighted bit of legislation. Ooh, don't get me started on IR35 . . .

 

Best advice is to be as straight as the Law says ? Its a gruesome task facing the gestapo (Tax hooligans) ....

Make sure the Accountant knows everytime you fart cause for sure they.... (lookout) ....will....

Nearly there '' 3000th post ....I'm pissed ignore me .... (pint) ....

 

Just gone Limited meself and yes, my accountant is kept up to date monthly. Incidentally, the Inland Revenue have been owing me over £5,000 for over two years now. it's amaing how the ***** take their time when the money is owed out - a total different kettle of fish when they think we owe them though, isn't it? (

 

They pay good interest, though

I always pay my corporation tax bill ASAP as they pay better interest than the banks and they just send me a cheque at the financial year-end.

 

Some of the advice on this thread is shocking

Essentially, the days of having a job but doing it via a "contracting" route are virtually dead and buried.

The only real remaining benefit to going down the contracting route is that once every few years you can make yourself redundant and therefore pay yourself up to £30k tax free. Obviously you can't just do that every year else the taxman will give you a "I know what you're doing" look.

Take professional advice.

 

Shocking? Really?

I must re-evaluate my lifestyle. I thought it was all going quite swimmingly.

 

And another thing

The advice about making yourself redundant from a close company as a tax fiddle. How shocking is that?

 

Well in my position now.... (nodding2fingers) ....I've seen the light let someone else Pay the **** on my Behalf ....

A regular income to me is like taking piss'' i cant believe i didnt let some other person''take the pressure yrs ago.

My life is Now complete .... (dancin) ....And i dont even bother thinking when wll the next Big ''Job'' come in.... More time for .... (blaze) ....this is freedom....

 

well

it's allowable AFAIK.

Anyhow who cares. Clearly BFC fans are all tax accountants, so I guess as an accountant I should keep my mouth shut in future!

 

You Have PM - take care

 

Not necessarily

No need to keep your mouth shut, as you put it, but it'd be nice if you were a bit more specific in your criticism. I just took umbrage at the generality and tone of your post. People are only trying to help and some of us do have some useful experience of this kind of thing. Still, I'd be happy to be put right on specific issues - anything to keep on the right side of the IR.

 

never had as much interest in a posts cheers lads!

As for work my mate would be my main source of income..... i.e. he can guarantee me so much work a year. However, I have a number of other contacts who regularly phone me up e.g. old boss/colleague who is snowed under and needs extra help.....

So the ltd company sounds like the best option.

As for accounts my neighbour is an accountant I was thinking of offering him some work on the side..... other option is as Brewery86 get someone else to organize it all. This is what the agency arranged for me last time out....

 

Question: start up for small contractor which is best option Sole Trader or Ltd Company?????

I am setting up on my own as a CAD draughtsman. To start with I will just do a few hours here and their for a few contacts I have. Then hopefully things will take off from their, contcats will grow and I will leave my current post and go full time.

My problem is that I am very confused as to which is the best option i.e. set up as a Sole Trader or as a Limited Company. I have friends who are contractors and accountants and all seem to have a very mixed opinion.

Am I correct in thinking that as a Sole Trader, I as and individual will be liable for any losses/claims and could lose possessions i.e. house, car etc. Where as if registered as a Ltd company, it is the company that would be liable?

Any advice would gratefully be appreciated, thank you.


Regards

Johnny the Tyke

 

Being a subcontractor or employed depends on......

Will you supply materials, workwear, public liability insurance,own your own vehicle and fill it with fuel. Will you invoice him for each contract rather than just a weekly wage?

If not then the Inland Rev will insist that you be an employee rather than subcontractor.

Your rate of tax or wether or not you recieve gross payments will depend on your annual turnover as well. If your a verified subby you will be deducted 20% if not 30% if you can prove you earn a certain amount from subcontracting then you can get on a gross payment scheme.

I employ both paye and subcontractors and the revenue are very helpful if you ring their helplines. IM me and ill help you as much as I can!

 

why is it taking the revenue over 2 years to settle ?

has the overpayment been agreed ?</p>

if so I'm astonished it's taken that period of time. Most repayments are handled in weeks not years. </p>

Care to fill me in ?</p>

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