Setting up a limited company for contract work Setting up a limited company for contract work - Page 3
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  1. #21

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    Quote Originally Posted by jrshubrook View Post
    Okay sort of following you, the problem I have is that after completing the calculator based on a limited company without going fully in depth and on most other umbrella sort of styled calculators I always end up about £400-£500 short of what I calculate.

    From what im learning so far then there is insurance to take into account and other expenses but even with these expenses the numbers don't add up and seems to make more sense to do it myself with up to £500 extra in my pocket each month.

    I'm assuming the differences are down to when setting a ltd company up under a company they pay a wage of the max amount and not taking advantage of dividend payment instead which are from what I've read much more tax efficient and no NI payments are paid.
    GO UMBRELLA OR FTC!!!!!

    You're inside IR35 from your other comments. That alone makes a LTD pointless as you cannot just pay dividends and avoid tax like you think you can.
    See You Next Tuesday

  2. #22

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    Quote Originally Posted by stek View Post
    Then I'd say you're most likely IR35-caught.
    I understand why you think this but I'm fairly sure I am outside the IR35 and is generally how I'm approaching it. A few of my mates are in similar positions with the same recruitment consultancy and have LTD companies set up and having more money at the end of the month...

  3. #23

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    Quote Originally Posted by jrshubrook View Post
    Okay sort of following you, the problem I have is that after completing the calculator based on a limited company without going fully in depth and on most other umbrella sort of styled calculators I always end up about £400-£500 short of what I calculate.

    From what im learning so far then there is insurance to take into account and other expenses but even with these expenses the numbers don't add up and seems to make more sense to do it myself with up to £500 extra in my pocket each month.

    I'm assuming the differences are down to when setting a ltd company up under a company they pay a wage of the max amount and not taking advantage of dividend payment instead which are from what I've read much more tax efficient and no NI payments are paid.
    Put your figures into this and see what comes up;

    https://www.nixonwilliams.com/free-r...pay-calculator

  4. #24

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    Quote Originally Posted by Lance View Post
    GO UMBRELLA OR FTC!!!!!

    You're inside IR35 from your other comments. That alone makes a LTD pointless as you cannot just pay dividends and avoid tax like you think you can.
    I'm outside IR35 it may seem contrary to normal working forseeable future workers. A few of MY mates have LTD set up and get more money than when they were set up with umbrella companies.

    This thread was mainly to confirm accuracy of the accounts so i could avoid paying accountancy fees and increase money in my pocket which is my best bet at a low rate.

  5. #25

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    Quote Originally Posted by radish2008 View Post
    If I remember correctly you said the low rate would put him inside. I think he should spend a weekly invoice on a contract check.
    memory is a fickle and unreliable thing.

    I said.....
    "For a start you're gonna be inside IR35 as I doubt that for that rate you'd not be under the total direct control of your client (and if you're good enough to not be controlled then you're not very good at negotiating a rate)."

    Key bits highlighted.

    To be honest I don't think he should spend any money on a LTD, or a contract check and should take the advice given by multiple people on the thread.
    Last edited by Lance; 23rd February 2018 at 16:08.
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  6. #26

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    Quote Originally Posted by jrshubrook View Post
    I understand why you think this but I'm fairly sure I am outside the IR35 and is generally how I'm approaching it. A few of my mates are in similar positions with the same recruitment consultancy and have LTD companies set up and having more money at the end of the month...
    It's not you who decides though - it's driven by the terms of the contract, the nature of the role and ultimately what HMRC think. All you can do is due dilligence, get the contract IR35 checked and the boxes ticked.

    What other people are doing/getting away with is of no consquence, sort yourself out, stay legal and you won't get bum-raped by Hector a few years down the line...

  7. #27

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    Quote Originally Posted by jrshubrook View Post
    I'm outside IR35 it may seem contrary to normal working forseeable future workers. A few of MY mates have LTD set up and get more money than when they were set up with umbrella companies.

    This thread was mainly to confirm accuracy of the accounts so i could avoid paying accountancy fees and increase money in my pocket which is my best bet at a low rate.
    What makes you think you are outside?

    You haven't even started the role so you clearly don't understand IR35 if you think that you're outside at this stage.
    And with such basic knowledge of contracting you want to do your own accountants? HINT: It's a lot more than basic payroll.

    Methinks that £120 might be too much with your level of failure to grasp basic concepts.

    Have any of your mates been investigated for tax compliance and been found clean?

    You can do what you want. At the end of the day, it's your livelihood and liberty at risk.
    Last edited by Lance; 23rd February 2018 at 16:07. Reason: grammar
    See You Next Tuesday

  8. #28

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    Default Setting up a limited company for contract work

    Quote Originally Posted by jrshubrook View Post
    I'm outside IR35.
    Who says? And why?

    What’s your ROS situation? Have you assessed the D&c or MOO?

    I’d take a punt that you can’t send a sub; @£120 pd you’re low enough level that you’ll likely be subject to d&c and your comments already confirm you have MOO issues.
    Last edited by Alan @ BroomeAffinity; 23rd February 2018 at 16:11. Reason: Grammar

  9. #29

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    Quote Originally Posted by Lance View Post
    memory is a fickle and unreliable thing.

    I said.....
    "For a start you're gonna be inside IR35 as I doubt that for that rate you'd not be under the total direct control of your client (and if you're good enough to not be controlled then you're not very good at negotiating a rate)."
    You only needed to highlight this bit.

  10. #30

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    Quote Originally Posted by Lance View Post
    What makes you think you are?

    You haven't even started the role so you clearly don't understand IR35 if you think that you're outside at this stage.
    And with such basic knowledge of contracting you want to do your own accountants? HINT: It's a lot more than basic payroll.

    Methinks that £120 might be too much with your level of failure to grasp basic concepts.

    Have any of your mates been investigated for tax compliance and been found clean?

    You can do what you want at the end of the day, it's your livelihood and liberty at risk.

    I've a temporary contract role before in a completely different role for the same rate of £120 a day. I went through an umbrella company then and got back around £1500-£1600 which is like £600 below what i've calculated and about £300 less than a limited company (based on calculator done earlier).

    I fully understand basic accounting (I have AAT level 2 under my belt and studying level 3) to do my own accounts and save in the long run especially when i start increasing my rate, so i dont think failure of basic accounting will be a problem, could be wrong though. Im still learning and if im not confident then an umbrella will be the route i take.

    To be honest mate i dont know if they have been investigated and come clean.

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