Invoicing Agency POST Inside IR35 via Limited Company

[ntdmr]

Apologies if this has been asked before, I tried to search but didn't find anything.

My current contract within the public sector runs out at the end of March, although I have had an offer to renew on a higher rate to offset the change (if my calculations are correct!).

My agent has told me if I want to continue through my Limited Company I need to invoice them my day rate minus 13.8% and 0.5%.
e.g £500 - 14.3% = £437.45.

Is this correct way? I am confused about the £8112 EmployERs NIC allowance? When is this taken into account? Or will this come back automatically via a HMRC rebate? Obviously I don't want to over pay my EmployERs NIC!

Finally charging VAT.
I believe I can continue to carry on charging VAT which will be on my full day rate (e.g. £500)? How would I pay myself the 3.5% (20%-16.5%). Does this have to go through my own companies PAYE?

Thanks

[northernladuk]

This help?
http://forums.contractoruk.com/showthread.php?t=120175

[ntdmr]

Not really, unless I am missing something?
Helps tell me that is it possible, doesn't help answer my questions re employers NIC rebates and VAT.

[eek]

Not really, unless I am missing something?
Helps tell me that is it possible, doesn't help answer my questions re employers NIC rebates and VAT.

I think you are missing the fact that no-one knows how paying a limited company is supposed to work..

[Andy Hallett]

1) Contractually agree your rate
2) invoice that
3) receive payment minus PAYE and NIC

Not sure why you would deduct 14.3% off what you are contractually entitled to!

[northernladuk]

1) Contractually agree your rate
2) invoice that
3) receive payment minus PAYE and NIC

Not sure why you would deduct 14.3% off what you are contractually entitled to!

Isn't it the same as newbie tax you guys impose on new contractors?

[nathandeamer]

I think you are missing the fact that no-one knows how paying a limited company is supposed to work..

Brilliant. I still want to be able to charge VAT and have my own limited company, otherwise I would look at umbrellas.

[nathandeamer]

1) Contractually agree your rate
2) invoice that
3) receive payment minus PAYE and NIC

Not sure why you would deduct 14.3% off what you are contractually entitled to!

My agency is telling me to invoice them the amount that they will actually pay my company (e.g. my day rate minus employers NIC and apprenticeship levy). This would also mean the payment amounts would match up in my accounting software.
Then I pay myself this via PAYE.

[nathandeamer]

I think you are missing the fact that no-one knows how paying a limited company is supposed to work..

Testing...

[Hairlocks]

My agency is telling me to invoice them the amount that they will actually pay my company (e.g. my day rate minus employers NIC and apprenticeship levy). This would also mean the payment amounts would match up in my accounting software.
Then I pay myself this via PAYE.

Nope the agency will do the PAYE bit. So your invoiced value of £437.45 will be about £271.83 to your limited company to cover employees NI and Tax.

If you are VAT registered you will probably need to add the 20% (addition £87.49) and then pay HRMC £86.61

If I was going to do a contract inside IR35 I would do that contract under a umbrella and keep the limited company for my next outside gig.