My brother and I started contracting! Any advice re: Ltd company??

[ASB]

Even if mum did some genuine work for her salary it would be ineffective overall due to changing her benefit entitlement.

[ASB]

Of course a ltd can be effective on 35k a year. There is a potential saving I payments made to the revenue of about 5k outside ir35. Running costs broadly similar to brolly fees.

[Jessica@WhiteFieldTax]

Of course a ltd can be effective on 35k a year. There is a potential saving I payments made to the revenue of about 5k outside ir35. Running costs broadly similar to brolly fees.

Concur.

Assuming outside of IR35. - and for OPs benefit this is critical - then 25.8% composite NI rate for income over NI thresholds means the cost effectiveness threshold for a limited company is quite low.

It's less easy to factor in the hassle factor v umbrella and opportunity cost of contractors admin time.

[Jessica@WhiteFieldTax]

@OP

Shared companies nearly always end in tears.

Get some advice from an accountant familiar with IR35 and contracting.

[Scruff]

Mum will be far better off spongeing off the taxpayers, as opposed to taking your hard earned dosh. Tell her to carry on watching Jeremy Kyle whilst you and your bruv bash it out every day.

[SueEllen]

Also you shouldn't pay "rent" to your mum instead you should be paying your shares of the household expenses.

That way if she is questioned by the job centre she can truthfully and clearly say "My sons' are just paying their shares of the household expenses and no money goes into my account". For example you are all responsible for the council tax however as she isn't earning an income you both should pay it between you.

After all you don't want the job centre penalising her do you?

[LisaContractorUmbrella]

You should get your contract reviewed for IR35.

If your contract is outside of IR35 you should speak to your agency about whether or not contracts could be re-written so that you could be paid via your own limited company.

If your agency agrees, you should contact an accountant asap regarding everything else as you clearly don't have a clue what your talking about.

I should just point out that having your contract re-written to be outside IR35 will mean squat if your working practices actually put you inside. You may or may not decide to go the Limited route based on what the others have said here - if you decide not to then an umbrella company is the sensible alternative for you; just be aware that companies advertising 80-90% take home are likely to get you in heap big trouble with HMRC.

With regard to paying rent to your mum and claiming it as an expenses - this wouldn't, in my opinion, be allowable

[mudskipper]

This person posted an identical post on the MoneySavingExpert forum and I've already answered them there so I'm not going to repeat myself...except to say again it hardly seems worth the effort on such a paltry rate. It just equivalent to what, £35k gross salary maybe?

I don't think there's any call to be condescending.

[ContrataxLtd]

Of course a ltd can be effective on 35k a year. There is a potential saving I payments made to the revenue of about 5k outside ir35. Running costs broadly similar to brolly fees.

+1 to that, I've got a couple of clients on ~£35k turnover per year and they seem very happy running a Limited company, even if the savings aren't 'huge' compared to bigger turnovers etc.

[Bunk]

+1 to that, I've got a couple of clients on ~£35k turnover per year and they seem very happy running a Limited company, even if the savings aren't 'huge' compared to bigger turnovers etc.

I started using a Ltd for financial/tax reasons but now I also prefer having control of the money rather than handing it over to an umbrella and hoping that they remember to pay my tax, and not run off to the Caribbean, spend it on flash cars and mistresses, go bust, or all of those.

I think that would now make me choose Ltd over brolly even if there was very little financial advantage to it.