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Employee Salary and NI Payment

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    #11
    I don't understand the comment that the business isn't profitable and can't afford an accountant, yet you have enough money coming into the business to pay you and your wife a salary

    A contractor accountant typically costs around £100 a month. When I went with mine, they didn't ask for anything up front, so it's not like you have to fork out a large sum up front. It'll be about £100 next month.

    Sure there's a risk that your contract finishes leaving you a bill for them, but considering you clearly don't have a clue on the basics, I'd say the bigger and far more costly risk is getting your tax affairs wrong.

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      #12
      What Frontender says and add that the set up is the key bit. Get the shareholding wrong or start paying yourself the money that should be set aside for tax and the accountants first job is to try get you out of trouble without a large tax bill or fine. Get it right first time.

      If money really is a problem Gorilla Accounting give the first two months for free so you can get some money in the bank.

      For most of us and particularly people like yourself an accountant is a necessity not a luxury.
      'CUK forum personality of 2011 - Winner - Yes really!!!!

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        #13
        Originally posted by northernladuk View Post
        What Frontender says and add that the set up is the key bit. Get the shareholding wrong or start paying yourself the money that should be set aside for tax and the accountants first job is to try get you out of trouble without a large tax bill or fine. Get it right first time.
        The OP's attitude is particularly worrying in this regard. e.g. Having a wife as a shareholder could make absolutely little sense if she's working and earning anything close to the higher rate. He's probably just heard that it's a good idea from another contractor or something.

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          #14
          Originally posted by FrontEnder View Post
          The OP's attitude is particularly worrying in this regard. e.g. Having a wife as a shareholder could make absolutely little sense if she's working and earning anything close to the higher rate. He's probably just heard that it's a good idea from another contractor or something.
          The bit that worries me is:

          when I break even and become profitable,
          If the OP is an IT contractor and in contract, it is hard to see how you can not be profitable. If the OP is not a traditional daily rate IT contractor, then this is probably the wrong forum.

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            #15
            Originally posted by SueEllen View Post
            Things like insurance and VAT need sorting from day 1.
            Why does VAT need sorting from day 1?
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              #16
              Originally posted by TheFaQQer View Post
              Why does VAT need sorting from day 1?
              Good to know whether or not you need or want to be VAT registered.

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                #17
                Originally posted by northernladyuk View Post
                Good to know whether or not you need or want to be VAT registered.
                What company needs to be registered on day 1? You might want to be registered, but I'm not sure you ever need to be registered.

                It may be good to know that you might want to be registered, but it's not something that "needs sorting from day 1".
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                  #18
                  Correct but I guess it's just trying to help the OP rather than confuse them with semantics. Sorting it from day 1 could have meant address the VAT and plan what to do from day 1 and not necessarily apply for it.
                  'CUK forum personality of 2011 - Winner - Yes really!!!!

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                    #19
                    Originally posted by northernladuk View Post
                    Correct but I guess it's just trying to help the OP rather than confuse them with semantics. Sorting it from day 1 could have meant address the VAT and plan what to do from day 1 and not necessarily apply for it.
                    Exactly. This is no a case for confusing the issue.

                    Contracts, in my experience, state a daily rate of x thousand Euros / Pounds + VAT. VAT No. is sometimes requested at this stage as well.

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                      #20
                      Originally posted by Nishant View Post
                      I will have the luxury of keeping an accountant.
                      It's not a luxury. Unless you are competent with financials yourself, it's a necessity.
                      Down with racism. Long live miscegenation!

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