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View Full Version : Need some advice on Composite companies please



chrisbutters
1st July 2005, 13:53
I first worked last year as a contractor using a composite company called PCL I was advised to use them by a work collegue at the time, everything was good about it, money etc. I was payed in a small salary & the rest in dividends.

Now, I have just started a new contract with a new client & PCL won't let me rejoin as they say their solicitors won't allow them to employ me as now work outside the Aircraft Industry, which is fair enough. So, the problem I have now is trying to find a new composite company to pay me in the same way as before, I have looked and tried all the various calculators on the umbrella companies websites, such as properity4, Parasol etc, but these all seem to operate using a PAYE salary system with no dividends, which seems a lot less take home money than I used to take home with the dividend system.

Does anybody know of any good composite companies I could try ?, Also do the Umbrella companies such as Parasol operate a composite company if you fall outside of IR35 ?, would really appreciate some advice.

Thanks

Chris8o

malvolio
1st July 2005, 14:36
Use an umbrella and be outside IR35...

It's your call, but look at using a Ltd Co - it's really not that difficult and actually pays a bit more than anything else, because you get to work with all the money rather than giving a percentage to someone else.

If you're hell-bent on using a composite, it's probably best to keep away from anyone with a number in their name - common opinion around here is to talk nicely to Parasol, who provide both composite and umbrella options but there are others.

It might be a good idea to do some research on how it all works, which might save you getting stung! And the other small point is that Hector seems more and more to be targetting people who take the low salary/high dividend route for special attention - and you really do not want to get in front of an IR35 investigation, even if you're well outside the boundary!

chrisbutters
1st July 2005, 15:10
Thanks malvolio & appreciate the helpfull advice.

I have just been talking with Brookson, who are recommended on here in the directory list, they seem really professional & are giving me 83% of my gross, but I fully take on board what you say about the investigations.

MisterGoof
1st July 2005, 15:14
remember that Hector will want his cut of those Divis at the end of the year

Underscore
5th July 2005, 09:08
No he wont. I now someone who has now been 5 years with a composite and has never had to pay tax on the divs.

marty_boy
29th September 2005, 23:08
If you're hell-bent on using a composite, it's probably best to keep away from anyone with a number in their name - common opinion around here is to talk nicely to Parasol, who provide both composite and umbrella options but there are others.



Hi - I've signed up with Parasol (First contract) but I see no mention of a composite solution on there website ? Just wondering if anyone has any first hand experience of Parasols composite solution ?

rooney
30th September 2005, 08:05
Unless Parasol have just launched a composite scheme they just operate a PAYE umbrella. There are a few who do composite although for some reason the majority operate in non IT sectors. Brookson in engineering, Gabem in construction and as previously mentioned PCL in aircraft. There are some specialist IT firms who operate it but they seem to backing away on this at the moment and I'm not sure why. No doubt it will be one of 2 factors: they aren't making any money on it OR the IR is sqeezing them.

monkeygeorge
7th October 2005, 17:38
I've been with Safe Solutions for a few weeks, everything's OK so far, despite them going into administration a couple of weeks ago!

George

boredsenseless
10th October 2005, 07:45
No he wont. I now someone who has now been 5 years with a composite and has never had to pay tax on the divs.

Strangely enough he doesn't ever ask for them until he feels like it, it is yours and in this case your mates job to disclose these. I suggest he does as they have a habit of knocking on the last day they can legally investigate and asking for a lot of money very quickly.

It's because of tw@ts like that that the whole IR35 rubbish originally got spawned.

Technically Blonde
15th October 2005, 08:54
No he wont. I now someone who has now been 5 years with a composite and has never had to pay tax on the divs.

must only be a basic rate taxpayer then. As soon as you earn more than the basic rate band limit (including the grossed up divis) you have to pay tax on the divis

Technically Blonde
15th October 2005, 08:56
I've been with Safe Solutions for a few weeks, everything's OK so far, despite them going into administration a couple of weeks ago!

George

I would strongly suggest that anyone thinking of going with Safe Solutions check their scheme with the Revenue first

KLM
20th October 2005, 13:36
Hi folks,

I read this with interest. I use the above company and get paid a small salary which I pay tax and NI on and then pay 19% corporation tax on the balance of my monthly earnings.

Whilst I have been contracting on and off for a while I have never really got the bottom of what I should and shouldn't do.

Is the above correct or do I fall into the same category i.e. I should be paying additional tax (above 19%) on the balance of my earnings?

I have spent a lot of time moving back and forth between the UK and Spain, where I lived for 4 years and until this contract wasn't particularly worried (from a tax perspective) as I didn't ever work long term in the UK.

However, having been on this contract for the time I have and reading this post it has made me wonder?

Apologies if this sounds naive but you have to start somewhere.

Thanks,
Karen

Darren@UptonAccountants
20th October 2005, 13:57
Hi folks,

I read this with interest. I use the above company and get paid a small salary which I pay tax and NI on and then pay 19% corporation tax on the balance of my monthly earnings.

Whilst I have been contracting on and off for a while I have never really got the bottom of what I should and shouldn't do.

Is the above correct or do I fall into the same category i.e. I should be paying additional tax (above 19%) on the balance of my earnings?

I have spent a lot of time moving back and forth between the UK and Spain, where I lived for 4 years and until this contract wasn't particularly worried (from a tax perspective) as I didn't ever work long term in the UK.

However, having been on this contract for the time I have and reading this post it has made me wonder?

Apologies if this sounds naive but you have to start somewhere.

Thanks,
Karen

If you're a basic rate tax payer, there's no further tax to pay...if your income including salary, divi's, etc goes into the higher rate then yes, you should be paying additional tax on your earnings.

KLM
20th October 2005, 14:11
Thanks for that - so if I go over 40% then I need to make additional tax payments? Do you know how that is calculated i.e. between 19% corporation tax nett amount and the actual amount I get paid? I assume I only pay any additional amount of tax on the amount over and above the threshold?

I think I've confused myself!!!

K

Darren@UptonAccountants
20th October 2005, 15:09
I think you need to speak to Safe Solutions or dig out the dividend vouchers and a P60 to see how much you've received.

KLM
20th October 2005, 15:12
Oh I dont use Safe Solutions which appears to be a good thing from the earlier comment. I use a company called Hexagon / Lyncott? Thanks for the advice I will ask them.

Best Regards,
Karen