Umbrella or Ltd Inside IR35

[swebb]

Hi,

I've posted a previous thread which is kind of related but thought I'd ask this question direct. I'm not sure at the moment if my current contract is inside or outside IR35 (gona get this checked next week). If I take the worse case and its inside IR35 is it really worth me changing from an umbrella to a Ltd company ?

I've read a lot of things on here about how Ltd is better but usually they are talking about the cases outside IR35, its not clear to me roughly what the advantage of it is inside IR35. If we take a yearly rate of say 80K gross what kind of amount would we be talking about taking off Mr Brown

I should say the reason I'm looking at changing is it really p*ssed me off every month when I look at the tax hit employer and employee NI arrrggg that just sucks

Thanks

Steve

[Sockpuppet]

From the "Should I trade as a Limited Company or umbrella" sticky at the top of this forum which I am sure you have read.

http://forums.contractoruk.com/threa...side+IR35.html

"Inside IR35

If you fall inside IR35 then the tax payable via an umbrella or composite Company will be around the same. There will be a saving of around 5% if you operate through your own Limited Company."

[swebb]

Thanks for that SP I must have missed it, my head is spinning from reading so much stuff on here Well 5% will easily cover the small extra cost of an accountant for a Ltd company and setting the company up. Its a damn shame you can't claim tax back on hardware though as I was looking at getting a MacBook Pro with a nice big monitor to

Cheers

Steve

[Sockpuppet]

AFAIK accountants are in addition to the 5% allowance. There was a post that mentioned it.

[gadget]

Its a damn shame you can't claim tax back on hardware though as I was looking at getting a MacBook Pro with a nice big monitor to

Really? I must have missed that. I see there's an upper limit of £500 per year on "equipment" but I've only seen that for expenses via umbrella companies. Is there really no scope for purchasing a PC for your Ltd company? After all, you'll need a PC for many aspects of administering the company, communicating with clients/accountants, producing timesheets/invoices etc... which you wouldn't have to do if you didn't have a Ltd company!

Can anyone clear this up for me?

[Sockpuppet]

You can't claim back the VAT if you are on the flat rate scheme unless it is over £2000.

AS said before you can claim what you like via your business whether or not it is seen as BIK is different. So claiming for a HTPC or media centre for "communcation to clients" is not the best idea. A £300 PC would get through but justifying why a 5.1 surround sound PC is needed might be hard to justify.

[swebb]

Mmmm so if for the sake of argument I'm a Java developer who works on gui front ends using video, sounds and fancy graphics getting a top notch Apple which also runs vista to prove to clients its runs on windows to will probably be ok

[cojak]

Gosh - Sockpuppet not going off on one...

I've just been worn down - I just don't have the energy to keep it up.

[brobi]

PM Me if you want a way out

Hi,

I've posted a previous thread which is kind of related but thought I'd ask this question direct. I'm not sure at the moment if my current contract is inside or outside IR35 (gona get this checked next week). If I take the worse case and its inside IR35 is it really worth me changing from an umbrella to a Ltd company ?

I've read a lot of things on here about how Ltd is better but usually they are talking about the cases outside IR35, its not clear to me roughly what the advantage of it is inside IR35. If we take a yearly rate of say 80K gross what kind of amount would we be talking about taking off Mr Brown

I should say the reason I'm looking at changing is it really p*ssed me off every month when I look at the tax hit employer and employee NI arrrggg that just sucks

Thanks

Steve

I have a solution that I use, and no I am not an accountant. I am a contractor but will only answer via PM as I don't want to compromise it for me!