New Job for Foreign Company but based in the UK. Help!!

[brodystevenson]

Hi all, I am wondering if anybody could help me.

I have always worked for companies based in the UK, who have paid me in the usual manner, I give them my bank details, they send me a payslip and the money appears in my account, with Tax and NI etc already being worked out.

I have just been made redundant, but have had an amazing offer from a Foreign Based company, who have no base here in the UK, but supply POS Systems to several UK retail stores, and the job offer I have been made is to be the support function for those POS Systems, working remotely here in the UK

They have suggested that i set myself up as an independent contractor and that they will pay me a pre-determined monthly sum in gross for my service. This is completely new to me so please excuse my naivety on this, but i have the following questions:-

1. What steps do i need to take to set myself up as contractor? Is this self employed/sole trader?
2. What are the costs to do this?
3. Do i create an invoice each month for the sum of my gross salary divided by 12?
4. If so can the company pay this invoice into my personal bank account?
5. I know i would need to fill in a tax return at the end of each year, but does this mean i pay my tax to HMRC in one lump sum every year, or can i set it up to be monthly?
6. Is this the same for NI? Again one yearly lump sum or monthly?
7. In addition to the monthly sum they will pay me, they will also cover all of the mileage i incur, and pay for any overnight accommodation? This part confuses the hell out of me, as would i need to pay tax and NI contributions for those payments aswell? For example if i pay £100 for a hotel, and £100 for petrol, its cost me £200, and the receipts i submit will be £200, but if i pay tax and NI on this i will be losing out?

Thanks for your help, and sorry if the questions are basic knowledge.

[NotAllThere]

1. What steps do i need to take to set myself up as contractor?
Read the First Timers guide over there----->

Is this self employed/sole trader?
No. You will be working through a private ltd company. That private ltd company belongs to you, is run by you but is your employer.

2. What are the costs to do this?
Not much. But an accountant will cost you £1000+ a year. And you need one.

3. Do i create an invoice each month for the sum of my gross salary divided by 12?
You bill as agreed with your client. And it isn't salary it's fee.

4. If so can the company pay this invoice into my personal bank account?
No. It's not your money. It's your company's. An entirely separate legal entity that you just happen to own and run. This is probably the one of the most important things to understand. Your company's money is not your money. You cannot treat it as such.

For the rest - go to point 2 and ask your accountant.

[brodystevenson]

Hi Notallthere,

Thank you for the quick response!!

I have just read the first timers guide you suggested, and it seems to imply that if i were to setup as a LTD company I would fall under IR35 due to the fact that I would solely be contracting for one company.

Is there no way this could work with me setting up as self employed? There seems to be less expense and red tape involved.

Cheers,

[northernladuk]

Hi Notallthere,

Thank you for the quick response!!

I have just read the first timers guide you suggested, and it seems to imply that if i were to setup as a LTD company I would fall under IR35 due to the fact that I would solely be contracting for one company.

Is there no way this could work with me setting up as self employed? There seems to be less expense and red tape involved.

Cheers,

Read it again. This time understand it.

[SueEllen]

Hi Notallthere,

Thank you for the quick response!!

I have just read the first timers guide you suggested, and it seems to imply that if i were to setup as a LTD company I would fall under IR35 due to the fact that I would solely be contracting for one company.

Is there no way this could work with me setting up as self employed? There seems to be less expense and red tape involved.

Cheers,

Hint - Apart from giving you a list of clients to visit do the foreign company tell you everything you must do?

Don't reply just read what the others have posted and think for yourself.