Is there much Point of having a LTD company if your inside IR35?

[Money Money Money]

What with the new budget coming to light, I've had a number of contractors questioning me as to what to do, Limited Company OR PAYE umbrella???

Now I know if your outside IR35 it would be well worth starting a LTD company and taking dividends.

BUT if your inside IR35 or worried you may be inside IR35 then surely its easier and more cost effective to use an umbrella.

What sort of costs would setting up a limited company entail?

Registering company name at Companies House - £?
Monthly Accountancy Fees - £?
Insurances - £?
Tax return at the end of the year £?

Any help would be appreciated

[kirk]

Ltd. all the way; just look how much the brollies are charging in "fees" each month..... oh and their dispensations that they all bang on about are just that, "their" dispensations!

[philip@wellwoodhoyle]

For many small companies, the 5% expenses allowance is smaller than the actual costs, so there is profit there. Also, there is scope for profit on the VAT flat rate scheme. Accountancy fees for your own ltd co seem to be comparable or less than the brollies. Also scope for making a bit of interest on the tax monies whilst they are in your bank account before the due dates. All small things, but they do add up.

[jh0711]

i think you are better with a brolly - unless you are planning to try to do other gigs or work at weekends etc which you may wish to put through your ltd co also.

there are large costs associated with setting up a ltd co - but if you are planning on being in business for yourself for a long period then it may be worhtwhile

if you only have a 6 month contract and are not sure what to do after then go brolly

[kirk]

i think you are better with a brolly - unless you are planning to try to do other gigs or work at weekends etc which you may wish to put through your ltd co also.

there are large costs associated with setting up a ltd co - but if you are planning on being in business for yourself for a long period then it may be worhtwhile

if you only have a 6 month contract and are not sure what to do after then go brolly

Where are the large costs???

[jh0711]

initial set up - £35-£250 depending on who you choose
insurances - £200-£500 per year
for a start

remember brolly set up is £0.00

[Pondlife]

there are large costs associated with setting up a ltd co

Company formation - free by accountant
Insurances - £200 all in (inc PI)
Monthly Accountant fees £64/month (tax deductable)

All of the above and more is covered on what you make from being on FRVS and the cash you can keep in YourCo's account until it needs paying.

Where are the large costs?

What are the brolly fees like?

[Bluebird]

initial set up - £35-£250 depending on who you choose
insurances - £200-£500 per year
for a start

remember brolly set up is £0.00

Nixon do ltd setup for nothing. - Co Hse I think is £20, which you can put through as a bona fide expense anyway...

Insurances ? - I don't suppoe the brollies pass these costs on down stream ?

[jh0711]

hey pondlife

who do you use as an accountant?

£64 quid a month including Ltd co set up is a bargain.
does this also include bank account set up?
what about if you actually want to speak to the accountant do they charge a consultancy fee?

is the service you get any good?

[Langkawi]

An Ltd can be set up for around £100 or less.

My accountant (Nixon Williams Ltd) set up mine in days for free. Subject to a £100 deposit which is offset against the monthly accounting fees of £60.

The VAT Flatrate scheme alone covers the accountancy fees and then some. And the £5,000 expenses (assuming you can use the majority of the 5K) is your leeway to save money on tax.

Also, I was of the impression that most brollies mean you having to fork out National Insurance twice (Employees and Employers). That was the deal breaker for me. I would be better of as a PAYE than I would in a brolly (but then my actual expenses wasn't that high).