What to do if you are currently with a Composite or Managed Company.

[Cowboy Bob]

No home to work cliams, no expense claims and no dispensation claims? Does this mean the Revenue will reverse or stop the dispensation's in place?

Umm, you do realise that the dispensation only applies to the umbrella in that they don't have to bother filling out the P11D? You still need to be able to prove that the expenses were incurred and you need the receipts if you are ever investigated. Claiming for expenses that you didn't incur is fraud, and depending on how much fraud you have committed could end up with you serving a spell at Her Majesty's pleasure...

http://forums.contractoruk.com/thread12495.html

[simondolan]

Initially I thought these new laws would only outlaw Composite and Managed companies?

Bt reading through a few webistes, it looks like the end of Umbrella's (as we know them) as well.

No home to work cliams, no expense claims and no dispensation claims? Does this mean the Revenue will reverse or stop the dispensation's in place?

The new rules will not outlaw umbrella's by any means - just composites and managed cos.

It will mean that level of expenses you can claim through an umbrella will drop significantly, in particular the home to work travel and associated lunch/per diem etc expenses will no longer be allowable.

[YNWA]

take out travel and per diem expenses, and that doesnt leave much though does it?

[robbo_rover]

take out travel and per diem expenses, and that doesnt leave much though does it?

Correct but I suspect that as with ir35 there will be ways around it tbh

[ChimpMaster]

Simon,

no answer to my earlier question?


Cheers

[jh0711]

I thought the reason you could claim home to work travel using a brolly is because you are an employee of that brolly and therefore their head office is your place of work.

When you go contracting to a client site you can therefore claim travel to and from work as it is not your normal commute to your normal place of work?

(24 month rule obviously still applies?)

[simondolan]

Simon

You say that "Your take home pay using your own Limited Company is usually in excess of 80%"

I think it's important to note that this is only for low paid contractors who do not fall into the 40% bracket (or not by much). For contractors earning more I would believe that the take home pay is more like 65% because they then pay dividend tax at higher rate of 40%.

So someone on contract value of £50k will get a return of ~ 80%
Someone on contract value of £100k will get a return of 65% - 70%

Having said that, it's still better than PAYE.

Please enlighten me if I am missing something obvious here.


Thanks.

Sorry - missed this one. Has been a busy couple of days!!

Depends very much on how you structure the remuneration from the Company as to how much you will get to keep. If you maxed it out you could net 80% from a £100k contract, but it does involve leaving a good deal of cash in the Company for a couple of years at least. Most contractors will come somewhere in between of course, so 70-75% from £100k wouldn't be out of reach for most.

Build in as well the VAT FRS saving and the interest you earn on the accumulated cash and it really does build up the take home.

[simondolan]

I thought the reason you could claim home to work travel using a brolly is because you are an employee of that brolly and therefore their head office is your place of work.

When you go contracting to a client site you can therefore claim travel to and from work as it is not your normal commute to your normal place of work?

(24 month rule obviously still applies?)

No, you can claim at present because by definition the contract site is classed temporary. From 6th April 2007 the site you actually work at will be classed as your permanent work place, even if less than the 24 months.

[jh0711]

so regardless of contract length or even frequecny - eg. 1 month for 7 days a week or 1 day a week for 7 months it will still be classed as a permanent place of work.

What about if you work on multiple sites?

How does this then work for lets say a salesman working for an umbrella - he/she will go out and do visits/work on clients sites/see agencies etc - is this therefore saying that the brolly company would not be able to pay him expenses because he works for a brolly?

[Mordac]

No, you can claim at present because by definition the contract site is classed temporary. From 6th April 2007 the site you actually work at will be classed as your permanent work place, even if less than the 24 months.

Even for ltd co contrctors?