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View Full Version : First Time Contracting - Advice Needed Please



bsf99
6th August 2004, 03:53
Hi

Me & a colleague have been offered some project based contract work. We will be doing this alongside our permanent jobs in which we both pay tax at the higher rate.

Should we set up a Ltd Company & pay ourselves dividends - there doesn''t seem to be any reason to pay a salary as we receive one already

Also - as the work is project based, with set time scales & achievables are we likely to be able to avoid IR35?

Many Thanks for any assistance

Brett

Also - if we go down the ltd co route acn anyone recommend a good accountant?

fiddleabout
6th August 2004, 11:44
Whether or not you use a Ltd. company depends on how long you expect this to last and how much you are making.

Even a low priced accountant such as the one we recommend on ************ charges £50 + VAT pcm and most are considerably more expensive. In that sentence is another gotcha - because my Ltd. is VAT registered my accountant effectively just costs me £50 pcm - if you are not VAT registered you can't reclaim the VAT so it costs more. (Actually as I registered for the flat rate VAT scheme I can't reclaim it either but I save more elsewhere from being flatrate).
You may possibly persuade a local accountant to do it cheaper if there is no VAT and no payroll but in the main local accountants cost more than specialist contractor accountants so it is unlikely to be much less.

Unless you are going to regularly make a healthy amount you will probably be better off self employed. Either way you will be stitched up for tax unless you barefaced cheat and pay all the extra money to your dog instead of yourself.

Oh - nearly forgot - as soon as you set up the Ltd. the IR are likely to be pestering you to set up a paye scheme too.

bsf99
7th August 2004, 00:06
Hi

I have now spoken to an accountant who advised that as we are hoping to do a substancial amount of work for this client & the fact there are two of us, it may be better to go down the ltd co route (although due to our jobs we are screwed for tax either way)

many Thx for your help

Brett