Newbie 6months contract Umbrella vs Ltd
+ Reply to Thread
Page 2 of 2 FirstFirst 1 2
Posts 11 to 13 of 13
  1. #11

    Nervous Newbie


    Join Date
    Apr 2017
    Posts
    3
    Thanks (Given)
    0
    Thanks (Received)
    0
    Likes (Given)
    0
    Likes (Received)
    0

    Default

    A goldmine of info on here.

    So as a newbie to IR35, Iíve got an accounting question related to the use of limited companies:

    Iím about to start a four-month gig, deemed inside IR35, through Capita CL-1. Billing through my limited company (50% shareholder with colleague who has the other 50%). First time weíve ever had anything to do with IR35 but this is an interesting project very local to me so worth taking on. And seems sensible to bill through our existing limited company.

    Day rate is £300. Understand that Capita will subtract around £35 or so to cover employer's NICs, so my company will actually be billing them around £265 a day plus VAT. And also understand that Capita will then deduct tax and personal NICs prior to depositing the remainder in my company account. All good and understood so far.

    What Iím not clear on is:

    1 Iíll have to complete an online timesheet at the end of each month Ė but Iíll also have to email/send Capita a VAT invoice, yes? So if I say worked 20 days in the month, the invoice would be for £5,300 (20 x £265) plus VAT of £1,060 which = £6,360. Correct?

    2 What funds will hit our company account? I assume it will be my post-tax salary PLUS the VAT? Iíll then transfer out the post-tax salary to my personal account but leave the VAT in the company account to settle our VAT bill.

    3 As I understand it, my post-tax salary wonít count towards company income (so I wonít get taxed on it twice) but how do you then account for it in your VAT return? Does my pre- or post-tax salary count towards our company turnover in any way?


    I really have searched this site hard for answers to these questions Ė but do point me in the direction of anything specific.

    The Capita team have been unable to give me any answers either!

    Cheers.

  2. #12

    Still gathering requirements...


    Join Date
    Mar 2017
    Location
    Reading
    Posts
    81
    Thanks (Given)
    2
    Thanks (Received)
    9
    Likes (Given)
    13
    Likes (Received)
    15

    Default

    You should invoice the full amount ignoring any deductions which are dealt with separately. Your accountant will make your IR35 calculations. If you look at FreeAgent guides on IR35( see a link below)you will find useful information to answer your questions. If you are not already using FreeAgent and you plan further work through your company, it is worth considering finding a FreeAgent accountant.

    https://www.freeagent.com/support/kb...n_kbarticle?su
    Last edited by Chart Accountancy; 7th April 2017 at 07:57.

  3. #13

    Nervous Newbie


    Join Date
    Apr 2017
    Posts
    3
    Thanks (Given)
    0
    Thanks (Received)
    0
    Likes (Given)
    0
    Likes (Received)
    0

    Default

    Thanks Chart Accountancy - very useful info and link.

+ Reply to Thread
Page 2 of 2 FirstFirst 1 2

Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts

Content Relevant URLs by vBSEO 3.6.0 ©2011, Crawlability, Inc.