Permie to Contractor

[mr bricolage]

Hi
I am new to the world of contracting, well not entirely new, 5years ago I did a short contract under an Umbrella company (Giant) but really lost out on it. So this time I want to do it properly and setup in the most tax efficient way.
I do fill out Self assessment because of the travel expenses arrangements my current company has so not sure what bearing that will have on me. From the advice on this site it seems that setting up a limited company with myself as the director and then paying myself a minimum wage is the way to go as a contractor. Then occassionally paying myself dividends from the company. Is this correct and if I land myself a contract through an agency then I am likely to fall under IR35? I can also register myself for a flat VAT rate but not sure what this is? Also there seems to be something about a 5% rule for expenses but I need clarifying on this.

Other questions I have:
1. Will I need a business bank account?
2. Shall I do the paperwork myself to setup the company or should I get a service as advertised on here?
3. I assume I will need an accountant?
4. I am in the process of purchasing training materials for myself, can I claim against company even though they are purchased prior to the setup of the company?
5. Is there any software to help with invoicing the agency/company , etc.

Sorry for all the questions and I am sure there will be more.

Many thanks

[oracleslave]

Other questions I have:
1. Will I need a business bank account?

Yes

2. Shall I do the paperwork myself to setup the company or should I get a service as advertised on here?

Depends

3. I assume I will need an accountant?

Yes

4. I am in the process of purchasing training materials for myself, can I claim against company even though they are purchased prior to the setup of the company?

Maybe

5. Is there any software to help with invoicing the agency/company , etc.

Yes

[TheFaQQer]

From the advice on this site it seems that setting up a limited company with myself as the director and then paying myself a minimum wage is the way to go as a contractor. Then occassionally paying myself dividends from the company. Is this correct

That tends to be what most people do

and if I land myself a contract through an agency then I am likely to fall under IR35?

Absolutely not. Read some of the guides --> before you start.

I can also register myself for a flat VAT rate but not sure what this is?

No - your company can register for flat rate VAT - have a look on the HMRC website if you don't understand what it is. Google is your friend.

Also there seems to be something about a 5% rule for expenses but I need clarifying on this.

If you are IR35 caught then there is a 5% deduction for expenses, and you pay tax on the rest of the income.

1. Will I need a business bank account?

yes

2. Shall I do the paperwork myself to setup the company or should I get a service as advertised on here?

You can do it yourself, or many accountants will include it as part of their fee.

3. I assume I will need an accountant?

You can do it yourself if you really, really want to (and some on here do). I wouldn't recommend it, though. Have a look at some of the threads about accountant recommendations, and do some research. I use InTouch (if you go with them, tell Clare that I sent you their way )

4. I am in the process of purchasing training materials for myself, can I claim against company even though they are purchased prior to the setup of the company?

Training is a difficult one, so probably not. Have a search for training on here. Keep the receipts and you can claim for some things bought prior to incorporation - your accountant will be able to help you.

5. Is there any software to help with invoicing the agency/company , etc.

I just use Excel to generate the invoice, print it on company letterheaded paper, scan it and email it over. Depends on what the agency / client expect to be honest. Work out the figures, put them on the paper, invoice, and then enter the invoice details into your accounts.

[cojak]

Welcome Mr B!

On the right you'll find CUK Navigation. >>>>>>>>>

Look down and you'll come to the First Timers section. Have a read through there.

Then pay particular attention to IR35.

If you go into the Accounting/Legal forum you'll discover the thread Basic advice when running your own contractor business.

Guide to Contracts also has some good articles.

Happy reading!

[mr bricolage]

Wow! Really quick responses and thank you for that. I have started going through all of the information to my right. It takes a while. I think my first port of call will be an Accountant. I'm based in North Oxfordshire so hopefully will find one who knows what their doing. Signing up for PCG seems to be the other no brainer.
Thanks guys and I am sure there will be more questions.

[northernladuk]

Wow! Really quick responses and thank you for that. I have started going through all of the information to my right. It takes a while. I think my first port of call will be an Accountant. I'm based in North Oxfordshire so hopefully will find one who knows what their doing. Signing up for PCG seems to be the other no brainer.
Thanks guys and I am sure there will be more questions.

Anything you can think of at this point will have been asked a multitude of times so check the thread out below and do some searching before you start posting..

http://forums.contractoruk.com/welco...uk-forums.html

For example....

https://www.google.co.uk/search?q=24...hrome&ie=UTF-8