Hello from a newbie! Hello from a newbie!
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  1. #1

    Nervous Newbie

    Smartie Driver has no reputation


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    Default Hello from a newbie!

    Hi everyone,

    I'm brand new to this so please be gentle

    I've always been in employed work, until I was made redundant earlier this year. I've now been offered a contracting position, but there seems to be so much conflicting information out on the web.

    I have a meeting next week with the agency and they want to know at that point if I want to use an umbrella company or my own Ltd Co......

    Apparently the contract is "IR35 friendly" and so I gather that the Ltd Co is the most tax efficient option - can anyone confirm this, please?

    Also, I understand I would draw a minimum salary (to the tax bracket only) and take the rest as dividends - can one draw dividends on a monthly basis? Or does it have to be the end of the year - in which case I couldn't afford to take this option as I need to meet monthly outgoings. Also I need to pay tax on the dividends I understand....????

    And finally (for now) I will obviously pay Corporation tax on the profits of the business - can I claim the cost of the train travel to London each day as a business expense?

    If anyone can help me out, or point me in the direction of a factually accurate and layman's term guide to all of this, I would be most appreciative.

    Many thanks

  2. #2

    Contractor Among Contractors

    Support Monkey is good enough for Jehovah!


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    Quote Originally Posted by Smartie Driver View Post
    Hi everyone,

    I'm brand new to this so please be gentle

    I've always been in employed work, until I was made redundant earlier this year. I've now been offered a contracting position, but there seems to be so much conflicting information out on the web.

    I have a meeting next week with the agency and they want to know ause t that point if I want to an umbrella company or my own Ltd Co......

    Apparently the contract is "IR35 friendly" and so I gather that the Ltd Co is the most tax efficient option - can anyone confirm this, please?

    Also, I understand I would draw a minimum salary (to the tax bracket only) and take the rest as dividends - can one draw dividends on a monthly basis? Or does it have to be the end of the year - in which case I couldn't afford to take this option as I need to meet monthly outgoings. Also I need to pay tax on the dividends I understand....????

    And finally (for now) I will obviously pay Corporation tax on the profits of the business - can I claim the cost of the train travel to London each day as a business expense?

    If anyone can help me out, or point me in the direction of a factually accurate and layman's term guide to all of this, I would be most appreciative.

    Many thanks
    dividends can be paid daily weekly monthly yearly, as long as the money is there to pay out

    travel is a business expense and can be claimed

  3. #3

    Contractor Among Contractors

    Support Monkey is good enough for Jehovah!


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    Quote Originally Posted by Smartie Driver View Post

    If anyone can help me out, or point me in the direction of a factually accurate and layman's term guide to all of this, I would be most appreciative.

    Many thanks
    Eyes left: First timers

  4. #4

    My post count is Majestic

    northernladuk has reached the peak. Play again?

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    Quote Originally Posted by Support Monkey View Post
    Eyes left: First timers
    Erm... eyes left????
    'CUK forum personality of 2011 - Winner - Yes really!!!!

  5. #5

    Double Godlike!

    malvolio - scorchio!

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    Quote Originally Posted by northernladuk View Post
    Erm... eyes left????
    Depends which way you're facing...

    @OP - Two guides to read, the one somewhere on this page and the Guide to Freelancing at www.pcg.org.uk. You have no idea how much you don't know, so have a good study of both, then ask questions.
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  6. #6

    I Am Legend

    BrilloPad has reached the peak. Play again?


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    Quote Originally Posted by Smartie Driver View Post
    Hi everyone,

    I'm brand new to this so please be gentle

    I've always been in employed work, until I was made redundant earlier this year. I've now been offered a contracting position, but there seems to be so much conflicting information out on the web.

    I have a meeting next week with the agency and they want to know at that point if I want to use an umbrella company or my own Ltd Co......

    Apparently the contract is "IR35 friendly" and so I gather that the Ltd Co is the most tax efficient option - can anyone confirm this, please?

    Also, I understand I would draw a minimum salary (to the tax bracket only) and take the rest as dividends - can one draw dividends on a monthly basis? Or does it have to be the end of the year - in which case I couldn't afford to take this option as I need to meet monthly outgoings. Also I need to pay tax on the dividends I understand....????

    And finally (for now) I will obviously pay Corporation tax on the profits of the business - can I claim the cost of the train travel to London each day as a business expense?

    If anyone can help me out, or point me in the direction of a factually accurate and layman's term guide to all of this, I would be most appreciative.

    Many thanks
    Hi Smartie

    A very warm welcome - I hope you will be very happy here.

    Assuming you intend to contract for more than a few months than ltd is the way to go.

    Don't take divs too frequently - the most I have ever risked is 5 a year. Too many and it looks like salary. Though techincally you can pay a div every day.

    You can claim travel.

    Be wary before venturing into general - its not a nice place there. The only sign of cricket will be when someone clouts you over the back of the head with a bat.

    Very best of luck and let us know how you get on.

    BP
    Fight HMRC now! Help sue HMRC individual officers/government ministers for malfeasance in office. Visit https://www.loanchargejustice.com/ and scroll to the bottom of the page to donate.

  7. #7

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    pmeswani has more data than eek

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    Quote Originally Posted by BrilloPad View Post
    Be wary before venturing into general - its not a nice place there. The only sign of cricket will be when someone clouts you over the back of the head with a bat.

    BP
    Apparently Radiator men and Gladiators live there too.
    If your company is the best place to work in, for a mere £500 p/d, you can advertise here.

  8. #8

    I Am Legend

    BrilloPad has reached the peak. Play again?


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    Quote Originally Posted by pmeswani View Post
    Apparently Radiator men and Gladiators live there too.
    Very true. Best to hide behind the sofa.

    General is an evil cess pit that would turn a priest into a swearing abusing insulting rabid troll. Everyone pretends to be some sort of Jack Reacher wheras they are more like a jack in the box.
    Fight HMRC now! Help sue HMRC individual officers/government ministers for malfeasance in office. Visit https://www.loanchargejustice.com/ and scroll to the bottom of the page to donate.

  9. #9

    Still gathering requirements...

    Asper A Gus has no reputation


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    Quote Originally Posted by BrilloPad View Post
    Very true. Best to hide behind the sofa.

    General is an evil cess pit that would turn a priest into a swearing abusing insulting rabid troll. Everyone pretends to be some sort of Jack Reacher wheras they are more like a jack in the box.
    I wont bother going there then.

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