Payment Options Post Budget

[LisaContractorUmbrella]

Many new contractors, and even some old ones, seem to be really confused by the new legislation that was introduced in the recent budget. To clarify - the only options available to contractors now are

1. To open their own personal limited company (refered to by some as a PSC or personal service company). You must have complete control of the running of your company and the company bank account. You may draw dividends from that company provided that your contract falls outside of IR35.

2. You can use the services of an umbrella company who will raise invoices on your behalf and will be responsible for your tax and national insurance payments. However, an umbrella company will always pay you through PAYE (Pay As You Earn) regardless of your IR35 status.

From 6th April no third party company can pay you dividends - there are no loopholes and no way round it.

HTH

[Barriebazg]

How about getting a post like this put as a sticky. Will save a SHED load of newbies asking the same questions.......


Barrie

[Bluebird]

Originally Posted by LisaContractorUmbrella

1. To open their own personal limited company (refered to by some as a PSC or personal service company). You must have complete control of the running of your company and the company bank account. You may draw dividends from that company provided that your contract falls outside of IR35.

Whist your post is correct, I think you need to be careful with terminology.

There is no such legal entity as a "personal" Ltd Company - it's just a Limited Company - it may only have one employee at the moment, but the term personal attempts to distinguish it from other companies which are treated exactly the same as it.

[malvolio]

Originally Posted by Barriebazg

How about getting a post like this put as a sticky. Will save a SHED load of newbies asking the same questions.......


Barrie

Bet it doesn't...

[bangface]

Originally Posted by malvolio

Bet it doesn't...

You love it malvolio!

I know secretly you don't want it to become a sticky so you can give the newbies your time honoured welcome to the board!!

[anorak]

What about Limited Liability Partnerships?

[LisaContractorUmbrella]

Originally Posted by anorak

What about Limited Liability Partnerships?

I am afraid that the legislation does apply to LLPs' as well Tackling Managed Service Companies

Sections 3.11 and 3.12 on page 23 give definitions.

HTH

[anorak]

Originally Posted by LisaContractorUmbrella

I am afraid that the legislation does apply to LLPs' as well Tackling Managed Service Companies

Sections 3.11 and 3.12 on page 23 give definitions.

HTH

I don't have time at the moment to read all of the Treasury document, and I may have got the wrong end of the stick, but aren't these two sections referring to MSCs operating as Limited Liability Partnerships?

I'm talking about contractors running their own LLPs with their spouses etc., rather than being co-directors of their own limited companies.

[test_guy]

There were no new legislations introduced during the budget

Only "drafts" were released, before the budget. These may come into force at a future point (I have seen 2008 mentioned) then again they may not.

Stop panicking people unecessarily.

Thanks

[Foresight One]

Dear all

There are still compliant solutions out there for contractors working in the UK. If you are serious about looking for an advisor then please contact me by PM (chrism@foresightone.co.uk) and I would be happy to discuss various solutions based on your circumstances.