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  1. #1

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    Default Hello all , and my first of hopefully not too many questions .

    Hi All .

    I'll try and keep this short and to the point . I'm a UK citizen and Spanish resident (21 years) . I've just started what's supposed to be a 6 month contract here in the UK . Obviously this will now make me a UK resident again . I signed a 6 month contract with a UK telecoms firm at the beginning of March . I didn't (and don't) have a Ltd company set up , so I just used my name and Spanish address when signing . I supplied my IOM offshore bank account for salary payments. I didn't have to provide any NI information . This contract hasn't been filed anywhere yet , so these details could be modified if necessary . The last time I contracted was 20 years ago . At that time I did have a Ltd company set up , but I closed it when I went full-time in Spain in 2000 . When I started at the beginning of this month an old colleague of mine mentioned signing up with an "umbrella" company . I spoke to them (Target) . The outcome of that conversation was that they would pay me minimum wage and the rest in a sequence of "loans" . They said that my take home would be around 83% . I started down that road , but the telecoms company that I signed with (only 6 people) weren't really happy about having another company in the middle . They had never worked with umbrella type companies and it was dragging on so I decided to bin that option for the time being . So , I'm back to where I started . I'm in the process of hiring an accountant at the moment , if required .

    OK . That's the story . Now here's my question . Just as an example . Let's say I make 6k a month . As I started in March I will be under the 11k tax limit for this tax year (16/17) . So I don't think I'll have to pay any tax on my return ? In the 2017/18 year I'll make 30k . 11k of that will be within the single person's allowance , and I'll need to pay 20% on the other 20k , which is more or less what I would have had to pay with the umbrella option anyway . I think that's right ?

    Anyway . As I say . That's where I am . I was really just looking for some advice . I plan on returning to Spain once I finish my contract here . I haven't been paid yet , although I will be this Friday , once I submit my time sheets .

    Any help , or advice would be appreciated .

    Thanks

    Sammy
    Last edited by Sammy Jankis; 28th March 2017 at 12:55. Reason: Typo

  2. #2

    My post count is Majestic

    northernladuk is a fount of knowledge

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    First and foremost... stay well away from 'loan schemes' and anyone offering80-90+% retention. You are going to have your pants pulled down very hard. Look at this forum and the horror stories that are in it..

    HMRC Scheme Enquiries

    If you are going to go brolly speak to Lucy at Contractor Umbrella. She posts regularly on here and has been working hard fighting legislation that's hit contractors recently. You'll see her in the Umbrella section and IR35 section posting away.

    PAYE Umbrella Companies for UK Contractors | Contractor Umbrella Company

    You didn't mention if you are through an agent but many clients and most certainly agents, don't want to deal with sole traders. They are liable for your taxes if you don't pay them so they will tend to insist on a LTD company or a Brolly.

    There are some comparisons between the two in this area.
    Umbrella Companies

    There used to be a rule of thumb that it wasn't worth going LTD if you were only bringing in around 30k or so due to the overheads for not much income. That's changed now due to the fact brolly users can't claim T&S expenses anymore so your personal circumstances will be key to which is the best option for you. There are some umbrella/LTD calculators around of varying quality but make sure you get one that is updated to exclude T&S.

    Give Lucy/someone at CU a bell and get them to do you an illustration and discuss your options.
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  3. #3

    Faqqed Off

    TheFaQQer - scorchio!

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    Quote Originally Posted by Sammy Jankis View Post
    OK . That's the story . Now here's my question . Just as an example . Let's say I make 6k a month . As I started in March I will be under the 11k tax limit for this tax year (16/17) . So I don't think I'll have to pay any tax on my return ? In the 2017/18 year I'll make 30k . 11k of that will be within the single person's allowance , and I'll need to pay 20% on the other 20k , which is more or less what I would have had to pay with the umbrella option anyway . I think that's right ?

    Anyway . As I say . That's where I am . I was really just looking for some advice . I plan on returning to Spain once I finish my contract here . I haven't been paid yet , although I will be this Friday , once I submit my time sheets .
    Someone's going to have to pay the appropriate level of income tax and national insurance - whether that is you, a legitimate umbrella, or the client is something you need to sort out quickly.

    This is going to be short term, and you are direct, so that gives a few options that you can consider.

    1) Would the client pay you directly via their PAYE? That means being an employee for the six months and they will take care of the tax and NI - you'll pay more tax but it's simple and straightforward. At the end of the six months, you leave - you don't have any claim for redundancy or anything like that so it's reasonably easy for the client too.

    2) If not, how about registering as self employed and having the client deal with you that way? The problem is that if you don't pay your taxes they become liable (whether they realise this when you sign up is a different question, though). You pay more tax than via a limited company, but that's not really worthwhile here.

    3) You sign up to a legitimate umbrella company and become their employee. Umbrella company invoices the client and they take care of tax, NI and apprentice levy (they will almost certainly have to pay this). You'll have to pay both employees and employers NI out of your rate though.

    4) Set up your own limited company and work through that. The most tax efficient, but I wouldn't bother in your case - this is too short term to waste time creating and closing a business, plus you may have issues getting a company bank account given your residence history.

    That's the order that I'd try to get the arrangements sorted - good luck and I hope it works out for you.
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  4. #4

    Nervous Newbie

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    Hi Guys , and thanks for the very quick replies .

    @TheFaQQer . Just to answer a couple of your points . The client don't and won't want me to be PAYE . They had problems previously with another business , and are only hiring on a contract basis . I'll need to go through the contract again regarding point 2 , but they weren't keen on the umbrella option 3 . Yeah . An accountant also told me that it probably won't be worth my while setting up a Ltd company again.

    @northernladuk . Thanks for all the info . I'll maybe contact that Lucy person . I'm more or less in the 35k region for 2017/18 . I have no expenses as such . The company will pay my travel expenses and they have supplied all the tools etc. All I have to deal with is my salary .

    One of the other guys working with me has set himself up as a "sole trader" , but he lives here 24/7 in the UK and he has quite a lot of expenses i.e he has to buy all his IT stuff , and I think he can claim that back on his tax returns (being a sole trader) .

    The same accountant this (sole trader) guy uses have quoted me 250 + vat to take care of my 2016/17 and 17/18 returns . Looking at the options I'm thinking that that might be the easy , and less stressful way to proceed . At the end of the day we're not dealing in big $$$$s in my case .

    I'll post back once I figure out what to do .

    Thx again ! Great , very helpful forum .

    Sammy
    Last edited by Sammy Jankis; 28th March 2017 at 13:14.

  5. #5

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    Quote Originally Posted by Sammy Jankis View Post
    Thx again ! Great , very helpful forum .

    Sammy
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