Hi all
I used to contract a lot through an umbrella company and my main issue was that I was always paid everything that I had invoiced every month which made managing gaps between contracts more difficult. My thinking this time was to set up my own limited company so that I am able to simply pay myself regularly e.g. my company invoices for 3 months @ £5,000 per month but I pay myself £3,000 per month over 5 months to cover the end of one contract and start of another. If I am caught by IR35, is there any reason I can't do this? I am only paying myself as an employee so it seems reasonable to me that I could do this.
An extension of this would be, if I were to contract for 12 months but pay myself less than I've invoiced for e.g. £60,000 invoiced but £40,000 paid in wages for the year, can I legally simply pay the corporation tax on the remaining £20,000 and then pay myself wages the following year from this money (again assuming IR35 applies to me)?
My wife and I are thinking of living and travelling in South America for 6-12 months so paying myself a small wage during that time would be useful for budgeting purposes and likely save on tax/NIC, I'm just not sure whether I'm allowed to leave money in the limited company after year end if I'm considered to fall within IR35.
Has anyone else had any similar experiences?
Cheers!
I used to contract a lot through an umbrella company and my main issue was that I was always paid everything that I had invoiced every month which made managing gaps between contracts more difficult. My thinking this time was to set up my own limited company so that I am able to simply pay myself regularly e.g. my company invoices for 3 months @ £5,000 per month but I pay myself £3,000 per month over 5 months to cover the end of one contract and start of another. If I am caught by IR35, is there any reason I can't do this? I am only paying myself as an employee so it seems reasonable to me that I could do this.
An extension of this would be, if I were to contract for 12 months but pay myself less than I've invoiced for e.g. £60,000 invoiced but £40,000 paid in wages for the year, can I legally simply pay the corporation tax on the remaining £20,000 and then pay myself wages the following year from this money (again assuming IR35 applies to me)?
My wife and I are thinking of living and travelling in South America for 6-12 months so paying myself a small wage during that time would be useful for budgeting purposes and likely save on tax/NIC, I'm just not sure whether I'm allowed to leave money in the limited company after year end if I'm considered to fall within IR35.
Has anyone else had any similar experiences?
Cheers!
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