It is worth running a limited company with low income?

[northernladuk]

I have assumed that IR35 doesn't apply and a salary of £8,424 is paid on the limited company scenario.

So we need to get in to the IR35 status of his gig before he can make a decision then.

[Craig@Clarity]

Hello,
I'm selfemployed but the company I work for is not allowing me anymore to be self-employed. My agency suggested me to go limited company rather then getting paid PAYE. I'm earning £20000-24000/year maybe more but that amount is for sure , on this amount of money I would be better of limited company? I'm working in construction so I will have to register the company CIS.
Thank you in advance!
Best regards.

Hi Mike,

As a rule of thumb as NLUK mentioned, somewhere over £30k+ profit will be when going limited is worthwhile. However, in your case in construction and CIS, if you go PAYE (Umbrella) then you'll need to apply the CIS they use on your jobs. I've not personally seen anyone use PAYE in this industry but I'm sure there are schemes out there.

Back on track, if you have to go limited, then nothing changes in how you actually carry out your physical work. You'll have to register your company for a new CIS (separate to your self employed one) and apply for either a gross payment certificate or have 20% deducted by the contractor, as you probably know. A limited company can be setup within 24hrs and CIS applied for thereafter. Everything would then switch over to the company name (invoicing, bills etc).

By the nature of your work in construction you're transient. The contractor should be declaring that your employment status has been considered and payments have not been made under contracts of employment when they submit their monthly CIS return (CIS300) and issue you with a payment certificate. Therefore, IR35 shouldn't be an issue.