Hi all,
I'm an electronic engineer. I've generally always worked as a salaried engineer but have been lured over the world of contracting for a short-term (6 month contract). So since this is my first time contracting I'd appreciate some advice.
I have already formed a limited company for some prior work that I have done (less than £1,000 GBP) so the taxman does not get too upset. I will continue to use that registration.
I would hope that some helpful folk on here would be able to guide me through whether what I am doing is a sensible arrangement. Obviously I will seek final advice from an accountant.
I will be contracting for a company at 30 hours/week at a rate around £40ph. I've verified IR35 and we should be good to go because I meet the right to substitution, I can perform the work as required at home (at my home office, although some work will be on site) and I have the option to decline to take work if I desire. I will however be contracted for a minimum 6 month period.
In addition, I will be performing work for other clients on an occasional basis (approx 10hrs/month). This work will not be contracted - it will be as and when required.
Finally, in spare time I will be working on my own R&D projects. The R&D project involves purchasing a large amount of components and equipment to develop something that I would hope could become a commercial product. There is no income from the R&D work at this time, only expense. And it will be performed in my home office, and will also require the purchase of equipment such as an oscilloscope, which will be for company work only.
The questions are:
- Can I expense things for the R&D project (working for myself to develop a product that may have future commercial value) through the same company that I use for my contracting - and from a tax perspective is this beneficial (as I can write-off expenses pre-tax, and reclaim VAT?)
- Can I work for multiple clients through my limited company and does this have benefits from an IR35 perspective even though I will be contracted to work an amount of hours per week?
- R&D Tax Credits ... would any R&D work I perform be eligible under the R&D tax credits scheme?
- I have existing lab equipment that was initially purchased for private use but I would be considering transferring this to the company as an asset, so would sell the assets to the company from my private person. Would this be acceptable and would there be any benefit to doing this (e.g. depreciation write-offs)?
Thanks,
Tom
I'm an electronic engineer. I've generally always worked as a salaried engineer but have been lured over the world of contracting for a short-term (6 month contract). So since this is my first time contracting I'd appreciate some advice.
I have already formed a limited company for some prior work that I have done (less than £1,000 GBP) so the taxman does not get too upset. I will continue to use that registration.
I would hope that some helpful folk on here would be able to guide me through whether what I am doing is a sensible arrangement. Obviously I will seek final advice from an accountant.
I will be contracting for a company at 30 hours/week at a rate around £40ph. I've verified IR35 and we should be good to go because I meet the right to substitution, I can perform the work as required at home (at my home office, although some work will be on site) and I have the option to decline to take work if I desire. I will however be contracted for a minimum 6 month period.
In addition, I will be performing work for other clients on an occasional basis (approx 10hrs/month). This work will not be contracted - it will be as and when required.
Finally, in spare time I will be working on my own R&D projects. The R&D project involves purchasing a large amount of components and equipment to develop something that I would hope could become a commercial product. There is no income from the R&D work at this time, only expense. And it will be performed in my home office, and will also require the purchase of equipment such as an oscilloscope, which will be for company work only.
The questions are:
- Can I expense things for the R&D project (working for myself to develop a product that may have future commercial value) through the same company that I use for my contracting - and from a tax perspective is this beneficial (as I can write-off expenses pre-tax, and reclaim VAT?)
- Can I work for multiple clients through my limited company and does this have benefits from an IR35 perspective even though I will be contracted to work an amount of hours per week?
- R&D Tax Credits ... would any R&D work I perform be eligible under the R&D tax credits scheme?
- I have existing lab equipment that was initially purchased for private use but I would be considering transferring this to the company as an asset, so would sell the assets to the company from my private person. Would this be acceptable and would there be any benefit to doing this (e.g. depreciation write-offs)?
Thanks,
Tom
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