Getting bored at work and fancy a change, so contacted an agency about going back on helicopters. As I've only got my fix-wing licence, I need to sit another exam (which is booked for August) and 6 months recent experience on helis, so they have offered me a 6 month contract as a mechanic, guaranteed hours and a really good hourly LTD rate.
So hears my question, how do these companies work? I haven't had much time to look into it yet, but all I know is they sort out your tax and NI for you.
Umbrella Companies
Umbrella Companies
S2 Elise ST (V6 spec)
Audi A4 Tdi (Shed Spec)
Discovery 3 (Wifes Spec)
Audi A4 Tdi (Shed Spec)
Discovery 3 (Wifes Spec)
Re: Umbrella Companies
We "employ" a graphic designer who is in essence running his own design house. We agreed with him an hourly rate, and he sends us a timesheet each week with what he has done, and what we are due to pay.Kev wrote:Getting bored at work and fancy a change, so contacted an agency about going back on helicopters. As I've only got my fix-wing licence, I need to sit another exam (which is booked for August) and 6 months recent experience on helis, so they have offered me a 6 month contract as a mechanic, guaranteed hours and a really good hourly LTD rate.
So hears my question, how do these companies work? I haven't had much time to look into it yet, but all I know is they sort out your tax and NI for you.
We then pay an umbrella company what he has asked for, and they I presume take a cut, and pay him his dues.
He has told us that they take care of all book keeping, sort out all tax issues and the deal from a legal point of view means that if anyone asks, he is an employee of the Umbrella Corp! (No Zombie jokes please
).It sounds like you get the best of both worlds, Self Employment, be your own boss, but all the boring crap (housekeeping
) is dealt with elsewhere for a nominal fee.Gary.
I have just completed my first Q as a contractor with my own LTD.
Basically the thing that is important is IR35 its a bit of tax law that is aimed at contractors.
As a contractor you can pay your self say 10k a year and then pay the rest in Dividends which is very tax efficient if you fall outside IR35.
So the tax you pay is in different levels
1 company tax which is on the bizs income less expenses (I put aside 25% to be safe)
2 on your salary of 10k you pay NI and income tax etc
3 the rest is in dividends which is 10% but you get that back as a tax credit - thats for the first 35k of dividends you pay after that it goes up.
Have a look at SJD they are specialist and are fairly cheap and will do all the tax and most of the admin for you.
Well worth googling IR35 as its a big part of how you operate what I have described is out side - if you are inside you end up being less tax efficient.
Also well worth going onto VAT flat rate - so you pay VAT but dont claim back VAT instead you invoice at 17.5% as usual then you pay the rev a lower percentage say 13% for my industry so you save there too.
Any Qs PM me - cheers Jamie
Basically the thing that is important is IR35 its a bit of tax law that is aimed at contractors.
As a contractor you can pay your self say 10k a year and then pay the rest in Dividends which is very tax efficient if you fall outside IR35.
So the tax you pay is in different levels
1 company tax which is on the bizs income less expenses (I put aside 25% to be safe)
2 on your salary of 10k you pay NI and income tax etc
3 the rest is in dividends which is 10% but you get that back as a tax credit - thats for the first 35k of dividends you pay after that it goes up.
Have a look at SJD they are specialist and are fairly cheap and will do all the tax and most of the admin for you.
Well worth googling IR35 as its a big part of how you operate what I have described is out side - if you are inside you end up being less tax efficient.
Also well worth going onto VAT flat rate - so you pay VAT but dont claim back VAT instead you invoice at 17.5% as usual then you pay the rev a lower percentage say 13% for my industry so you save there too.
Any Qs PM me - cheers Jamie
Here's a IR35 tax calc
http://www.ir35calc.co.uk/
http://www.ir35calc.co.uk/
-
The_Rossatron
- Posts: 1844
- Joined: Sun Jul 10, 2005 8:14 pm
- Location: Edinburgh, Scotland
- Contact:
Me too.jamie wrote:I'm too lazy to type anything constructive, but I do agree with the point above!foz01 wrote:Go it yourself, get an accountant and DIY!
Recent legislation make these umbrella companies very dodgy
I worked breifly under an umbrella company - Orange Genie through an Agency.
Orange Genie obviously took their cut, as did the agency take theirs. On top of that we had to pay our own employee's national insurance AND employer's national insurance and of course tax.
In other words we got shafted 4 ways before we even saw any money, and on top of that they'd fcuk up on average every month or so, not paying us then paying us double the next week shafting us on tax and they'd never forego their fee after a fcuk up. In short - I'd never go that route again and the same goes for about 20 of my colleagues!
"There is no emoticon for what I'm feeling right now."
Ferrari F355, Fiat Panda 100HP, Rover Mini Cooper
http://www.allflashnocash.com
Ferrari F355, Fiat Panda 100HP, Rover Mini Cooper
http://www.allflashnocash.com
Cheers guys.
I take it Dom is the resident accountant?
Got a meeting with the agency later this afternoon, so i'll see who they recommend. I'm going to have to sit down and do some research on this. Thanks Jamie for the heads up on IR35
I dont fancy setting up my own LTD at the mo, mainly because I'm not planning to contract for long, just 6 months at the moment.
Once I've actually sat down and looked at it, expect a lot more questions.
Dom you may expect a PM soon
Cheers
Kev
/easily confused faction
/
I take it Dom is the resident accountant?
Got a meeting with the agency later this afternoon, so i'll see who they recommend. I'm going to have to sit down and do some research on this. Thanks Jamie for the heads up on IR35
I dont fancy setting up my own LTD at the mo, mainly because I'm not planning to contract for long, just 6 months at the moment.
Once I've actually sat down and looked at it, expect a lot more questions.
Dom you may expect a PM soon
Cheers
Kev
/easily confused faction
/S2 Elise ST (V6 spec)
Audi A4 Tdi (Shed Spec)
Discovery 3 (Wifes Spec)
Audi A4 Tdi (Shed Spec)
Discovery 3 (Wifes Spec)
Do it your self and have a look at
http://www.sjdaccountancy.com/
Pros and cons are here
http://www.sjdaccountancy.com/about/our ... rella.html
http://www.sjdaccountancy.com/
Pros and cons are here
http://www.sjdaccountancy.com/about/our ... rella.html
Only just spotted this thread. PM or email me any time. I would give umbrella co a miss, just go self employed as a sole trader, and keep records from month to month on income and expenditure (i.e. an envelope full of recieptsKev wrote:Cheers guys.
I take it Dom is the resident accountant?
Got a meeting with the agency later this afternoon, so i'll see who they recommend. I'm going to have to sit down and do some research on this. Thanks Jamie for the heads up on IR35
I dont fancy setting up my own LTD at the mo, mainly because I'm not planning to contract for long, just 6 months at the moment.
Once I've actually sat down and looked at it, expect a lot more questions.
Dom you may expect a PM soon
Cheers
Kev
/easily confused faction
) Keep all P45s & P60s along the way too.-
steve_weegie
- Posts: 3248
- Joined: Tue Jun 28, 2005 12:40 am
- Location: Nessieland
Self employed / sole trader is best in my book - just make sure that you've got more than 1 customer and you should be fine. It also means that when you work from home, you can write off things like eleccy and heating against your personal tax bill.... Oh and of course all that nice new computer kit you might buy
Cheers,
Steve