Scottish Elises

Evening gents,

I may have finally found a job but it is a contract and I will have to become self employed by the looks of things but I have no idea if this is a good thing or otherwise. Nothing agreed or in concrete yet but the terms are 6 months at £17 / hour.

The guy was going on about becoming a Ltd company but I didn't follow entirely and he promised to send out an info pack for idiots.

Does anyone have any advice or experience of this?

Ta
Rich
/may have found a job faction

not sure if this owrks outside IT but you may be able to work under an umbrella company? So they do your invoicing/payroll etc. Technically I don't think your then classed as self-employed?

i'm sure someone more in-the-know will offer better/more accurate advice

You'll also have to pay Employer's National Insurance AND Employee's national insurance so take that in to account.

p.s Though personally I'd avoid umbrella companies at all costs!!

RICHARDHUMBLE wrote:Evening gents,

I may have finally found a job but it is a contract and I will have to become self employed by the looks of things but I have no idea if this is a good thing or otherwise. Nothing agreed or in concrete yet but the terms are 6 months at £17 / hour.

The guy was going on about becoming a Ltd company but I didn't follow entirely and he promised to send out an info pack for idiots.

Does anyone have any advice or experience of this?

Ta
Rich
/may have found a job faction

I've got a few consulatant mates who use umbrella companies - it saves teh hassle of doing your own tax! I don't deal with tax, but there are benefits to being a Ltd co- if you take your "salary" as dividends there are tax benefits - Dom deals in personal tax I think?

Self employed is fundamentally different from limited company.

Self employed means that you take all your income from all jobs, add it all up, subtract allowable expenses (e.g. if you're a painter then paint, brushes, ladders, maybe a % of travelling costs depending on exact nature of vehicle and usage, etc.) and then the rest is your taxable income - from there is pretty much goes like normal employed people, except that national insurance is charged at a different rate for self employed people. If you're in IT, there isn't that much they will consider as allowable expenses, though you may get a better deal on travel this way.

Doing a limited company means that you set up a LTD (or engage the services of an umbrella LTD) and they invoice for your time (plus VAT often, depending on the LTD's total turnover and business area). The LTD collects the revenue. You become an employee of the LTD and get paid PAYE as per normal employment. If it's your own LTD then you get to mess about a little as you can take a small salary and pay the rest as a dividend which doesn't attract NI charges - BUT - if you're in IT I would avoid this as the revenue is wise to it and considers it bad form (see IR35 on google for an explanation of what they don't let you do). Similarly in theory a LTD allows some scope for paying work-related expenses but I am not sure there are that many option lefts open in the IT world for allowable expenses!

The LTD has overheads because it needs accounts and returns of its own (you need to do a corporation tax return and a PAYE annual return at a minimum, plus quarterly VAT returns if you're VAT registered). Assuming you don't know how to do those yourself you instead need to pay someone else to do it - say 500-1000 per year. Of course you need to pile on top of this your personal returns, though they may not be required depending on your circumstances (at 17/hour you're probably not going to breach the higher rate tax threshold and so may not need to make a return).


The self employed route has a more complex tax return to do, but one tax return covers the whole smash for you and the business.

If you can go self employed, I think I would do that. Your prospective employer might not permit it though.

TBH, for 17/hour 6 month contract demanding that you go limited is taking the pi$$ They should be able to put you on their books as an employee for six months, but they don't want to do that because it costs them money.

RICHARDHUMBLE wrote:Evening gents,

I may have finally found a job but it is a contract and I will have to become self employed by the looks of things but I have no idea if this is a good thing or otherwise. Nothing agreed or in concrete yet but the terms are 6 months at £17 / hour.

The guy was going on about becoming a Ltd company but I didn't follow entirely and he promised to send out an info pack for idiots.

Does anyone have any advice or experience of this?

Ta
Rich
/may have found a job faction

You should try doing it through a company like Brookson , they deal with all the paperwork etc.

http://www.brookson.co.uk

Check out the HMRC website - http://www.hmrc.gov.uk/selfemployed/

Wow, thanks guys, I knew you would have some good advice!

Lots to look into then. Looks like I will go self emplyed and wing it from there, but I have alot of reading to do first!

Thanks again,

Rich

you have a u2u

Cheers Baggy!

Loots to think about!

TTFN

I am a contractor, have been for a couple of years. I am set up as a Ltd co. and i use a company called paystream who deal with all my tax etc. i have never not been paid in all the years i have used them, depending on your income they charge between 20-25 pounds a week to take care of your deallings, it's money well spent in my eyes..

cheers

boyner

ps/ PM me if you want a contact name at Paystream.