Contracting rates and take home pay
Discussion
Expenses are taking in to account are mileage and daily subsistence for working over 5hrs per day away from home they put in a higher amount if you are away from home 10hrs as well.
Most of the companies I have spoken to take these in to account. Brooksons seem very confident that the new legislation in April will not have an effect to there operating practise.
I’m also exploring the LTD Company and an account route as well.
Most of the companies I have spoken to take these in to account. Brooksons seem very confident that the new legislation in April will not have an effect to there operating practise.
I’m also exploring the LTD Company and an account route as well.
Prosperity4 were expensive - 6% of gross and they also skim the VAT differential without mentioning it to you. But they pay on time, invoice and pay slip accurately and I've just completed a tax return and their P60 was spot on. You get a call from your account manager every week.
Going as a Ltd is more £££ but more sweat too. I chose the easier life as I didn't think I'd contract for long - and then it turned out to be 1 year... Check http://forums.contractoruk.com/thread for the numbers.
You need to sign for a minimum period, 3 months or 6 I think. They have a reserve fund skimming a % off too - to cover holidays and sick pay hould you want tht sort of thing. I never used it and when i resigned it was returned in full - so you can get a sizeable exit bonus. Handy when re-entering normal full time payroll cycles.
Overall I'd say they cost a bundle but provided excellent service. Unlike the job agent ;-)
Going as a Ltd is more £££ but more sweat too. I chose the easier life as I didn't think I'd contract for long - and then it turned out to be 1 year... Check http://forums.contractoruk.com/thread for the numbers.
You need to sign for a minimum period, 3 months or 6 I think. They have a reserve fund skimming a % off too - to cover holidays and sick pay hould you want tht sort of thing. I never used it and when i resigned it was returned in full - so you can get a sizeable exit bonus. Handy when re-entering normal full time payroll cycles.
Overall I'd say they cost a bundle but provided excellent service. Unlike the job agent ;-)
I agree, I use them. There charges are not the cheapest but I feel comfortable that my tax and NI is sorted, the Mitigation fund is a good way of reducing your tax burden a little as you can get this back if you stop using them. I recently had a letter from them re the changes muted by "Golden" Brown for umbrella/ltd companies. They state that this will not effect them.
225 said:
Dont forget as a contractor you really are working out salary on roughly 44 weeks, what with sickness, holidays, bank holidays etc.
Setting up your own company is easy and the biggest hassle is setting up the company account I found. An accountant can do it all for you for about £100 and set up a token monthly wage of say £500 and then you take the rest as dividends and only pay 20% corporation tax.
Setting up your own company is easy and the biggest hassle is setting up the company account I found. An accountant can do it all for you for about £100 and set up a token monthly wage of say £500 and then you take the rest as dividends and only pay 20% corporation tax.
I use 50 weeks as I am mercinary !!
One week off a year + Stats ... Days not worked due to illness in 15 years as contractor = 0
UpTheIron said:
A bit harsh maybe, but I wouldn't touch an organisation that charges "10% charge on gross VAT savings" made by signing up to the flat rate scheme. What is their justification for that then?!!
Flat rate scheme is for under 150k turnover ... not much use to freelancers in general
eric mc said:
The changes are not mooted - they are definitely happening.
If the umbrella company is essentailly operating PAYE and NI on what they pay you, there will be little concern over these changes.
If the company is making use of dividends to pay its "staff", expect trouble.
If the umbrella company is essentailly operating PAYE and NI on what they pay you, there will be little concern over these changes.
If the company is making use of dividends to pay its "staff", expect trouble.
any opinion on the likelihood of the IR attempting to claw back retrospectively?
arfur said:
UpTheIron said:
A bit harsh maybe, but I wouldn't touch an organisation that charges "10% charge on gross VAT savings" made by signing up to the flat rate scheme. What is their justification for that then?!!
Flat rate scheme is for under 150k turnover ... not much use to freelancers in general
Most folks don't make £80-£85 an hour though.................
The bulk of contractors would be under the £150,000 threshold.
However, I have serious reservations about the VAT Flat Rate Scheme as it seems to me that it doesn't sem to work as originally intended.
It wasn't supposed to reduce a trader's overall VAT liabilities - which it seems to do in many cases. It was designed to reduce the administrative burden on small traders when it comes to completing VAT returns (which it doesn't always do either).
My hunch is that, at some point in the future, it will either be seriously revised or scrapped altogether.
However, I have serious reservations about the VAT Flat Rate Scheme as it seems to me that it doesn't sem to work as originally intended.
It wasn't supposed to reduce a trader's overall VAT liabilities - which it seems to do in many cases. It was designed to reduce the administrative burden on small traders when it comes to completing VAT returns (which it doesn't always do either).
My hunch is that, at some point in the future, it will either be seriously revised or scrapped altogether.
I've always been uncomfortable with the whole Flat Rate scheme, which is why I've never signed my company up to it.
My rationale is that the Revenue seldom, if ever, do anything to actually reduce my tax burden and I just feel like we're paying the "right" amount of VAT by actually calculating it properly and making a proper VAT return.
Besides, I take perverse pleasure in the fact that one can claim the VAT back on purchases, regardless of whether in fact my company might actually be better off financially on the Flat Rate or not.
My rationale is that the Revenue seldom, if ever, do anything to actually reduce my tax burden and I just feel like we're paying the "right" amount of VAT by actually calculating it properly and making a proper VAT return.
Besides, I take perverse pleasure in the fact that one can claim the VAT back on purchases, regardless of whether in fact my company might actually be better off financially on the Flat Rate or not.
Brookson illustrated around 81% for me too. They then decided after 2 months I wasnt infact elligible for mileage expenses hence its now more like 76%.
Question for those in the know:
Contracted to a company to provide project management. Due to the nature of their business I have to be on site to access the information required as they work with the MOD and the computer network does not allow remote access. Should I be allowed to claim them?
Question for those in the know:
Contracted to a company to provide project management. Due to the nature of their business I have to be on site to access the information required as they work with the MOD and the computer network does not allow remote access. Should I be allowed to claim them?
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