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

[Xtrain]

I wish the Gov would get smart. The average contractor might have revenue of say £60k, and hence pay about £15k tax. If he is forced to go permie, he will prob earn, say £40k, and pay about £11k tax.

Am I being stoopid here? i.e. does the Gov want less tax by forcing us all to become permies?!

Then again, I've always said that only the thickest and least educated people work for government, hence that explains their thinking...

I think the govt is being very smart here. The contractor won't go permie he will stay as is and pay more tax. They have just got rid of divvie payments to a large number of contractors and ruled out travel to work expenses & subsistence abuse in all the brollies. A masterstroke IMHO. All the true "in business" contractors will still be fine. For me personally I have no problem in not being allowed to claim travel to work expenses....no permies can so why should contractors who only work at one site be allowed too.

[Sysman]

I think the govt is being very smart here.

...

For me personally I have no problem in not being allowed to claim travel to work expenses....no permies can so why should contractors who only work at one site be allowed too.

I'm all right Jack, eh?

[monkeygeorge]

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

I've just asked my composite for what my take home pay would be without subsistence and it's still 80% (compared to 83%).

So there's no reason for me, as far as I can see, for going limited, seeing as I don't want to deal with any paerwork.

As for the travel to and from work, I'll continue claiming until it becomes outlawed.

I don't see how this means the end for composites, as many people have claimed here.

Please let me know if I've missed something obvious.

[Nixon Williams]

I've just asked my composite for what my take home pay would be without subsistence and it's still 80% (compared to 83%).

So there's no reason for me, as far as I can see, for going limited, seeing as I don't want to deal with any paerwork.

As for the travel to and from work, I'll continue claiming until it becomes outlawed.

I don't see how this means the end for composites, as many people have claimed here.

Please let me know if I've missed something obvious.

If the rules are enacted the Composite will be forced to apply PAYE & NIC to your income and no expenses for travel etc will be allowed. There is no way you would be keeping 80% of your income if this happens (unless your income is very low, ie under £10K!)

Alan

[monkeygeorge]

If the rules are enacted the Composite will be forced to apply PAYE & NIC to your income and no expenses for travel etc will be allowed. There is no way you would be keeping 80% of your income if this happens (unless your income is very low, ie under £10K!)

Alan

I thought this was only if the contract falls within IR35.

[boredsenseless]

I thought this was only if the contract falls within IR35.

The quote at the neginning of this thread specifically says that composites will no longer be affected by the intermediaries legislation (IR35 to you and I). Therefore they are saying that if you work through a composite it makes not a jot of difference what your contract suggests in relation to IR35 as you will be classed as an employee anyway by virtue of using the composite.

[monkeygeorge]

Thanks for the explanations.

[monkeygeorge]

...but I don't get why, for the same contract, individuals working through a managed Limited company can't receive dividends but those working through their own limited company can.

[malvolio]

Because, my deluded friend, MyCo is run by me, I take the commercial decisions, I sign the cheques, I pay the bills, I keep the profits, I own the shares.

For an MSC, someone else does all that decison making, takes a lump out of the profits and gives me some shares that are only a small part of the total via an articificial use of classes of shares, so on what basis would (or should!) I be able to claim business taxes and dividends?

[Newby]

So I have this right in my mind.

1. Umbrella's - They are going to turn into payroll companies (no expenses no point using them!)
2. If you are outside of IR35 then set up your own, and get a good accountant.
3. Composites and Managed Limited Companies, are in a world of trouble and are effectively shut down as of the 6th April.

In regard to the latter, are they just going to lie down and take it? I doubt it. Won't they just turn into accountants?