Own LTD. Sharing 6 months of experience

[maxima]

But the true equivalent permie wage to £121k gross as a contractor is about £65k...

When I said PAYE I didnt mean permanent position. I am talking about same activity with same money but different way to pay taxes.

[Bluebird]

When I said PAYE I didnt mean permanent position. I am talking about same activity with same money but different way to pay taxes.

right, that makes more sense.

[maxima]

BTW - about perms - where I am working - it is feasible to get 60k salary and then 60k bonus... I need to improve my speaking skills - and voila!

[tim123]

Am I wrong or whole LTD thing is just a big con from certain accounting companies?

Maxima,

Look, the basic rule is: there is nothing that the umbrella can do to make your take home higher that the Ltd cannot do as well.

There are however things which the Limited can do that the umbrella can't.

If you have a higher take home from the umbrella either:

the umbrella are running a scam which is not legit and which will end up with you having to pay back tax when you are audited.

Or

you are not running your Limited properly.

It simply is one or the other

tim

[malvolio]

When I said PAYE I didnt mean permanent position. I am talking about same activity with same money but different way to pay taxes.

OK, understand the point now. In effect, you would take your contractor gross income and set your salary to that level, less a small amount for admin costs, and pay tax on that. So why not just tick the box on the P35, which would have the same effect, still prevent you worrying about HMRC investigations and leave a bit of space for expenses and kit purchases?

But - and it's a big but - you would be assuming 12 months a year contracts. You wouldn't have any reserves for contract breaks, nor enforced absences. You can save ome taxed income as personal money of course, but it's better off stashed in a company where it wouldn't be taxed apart from 20% CT.

Like I said, you're actually comparing apples with wheelbarrows...

[maxima]

And I understand that 'running Ltd properly' is to go into some grey areas of taxation law (mostly about expenses I believe)...

Believe me - I know what are you saying. I just dont see any significant outcome from that to make me want to do so. Add a grand claiming miles or something? Buy a laptop every month and sell it on ebay?

I would preffer to find a better job.

[DaveB]

And I understand that 'running Ltd properly' is to go into some grey areas of taxation law (mostly about expenses I believe)...

Believe me - I know what are you saying. I just dont see any significant outcome from that to make me want to do so. Add a grand claiming miles or something? Buy a laptop every month and sell it on ebay?

I would preffer to find a better job.

It's nothing to do with grey areas about expenses. It's black and white. Go take a look at the HMRC web site and it will clearly tell you what you can and cannot claim for and how much you can claim. Right down to how much of your Oyster Card you can claim back. It is perfectly legal to do this.

Running your Ltd properly is about knowing exactly which rules apply and which don't and making sure you operate in a business like manner. By not understanding that tax implications and the legislation that applies you are costing yourself money. A lot of money.

[maxima]

But - and it's a big but - you would be assuming 12 months a year contracts.

Generally you are correct but in my case it is not that.

I have 1 months notice in my contract. Permies have the same in the company. For 60 grand perm they will ditch you same fast if they need to.

And almost all jobs I willing to take are about the same here.. So I wont rely on labour laws.. Unless I am Royal Mail postman!

[maxima]

It's nothing to do with grey areas about expenses. It's black and white. Go take a look at the HMRC web site and it will clearly tell you what you can and cannot claim for and how much you can claim. Right down to how much of your Oyster Card you can claim back. It is perfectly legal to do this.

Running your Ltd properly is about knowing exactly which rules apply and which don't and making sure you operate in a business like manner. By not understanding that tax implications and the legislation that applies you are costing yourself money. A lot of money.

My 150 expenses is Oyster Card. I pay money to accountants (the second from top in this forum) for that. So - I dont see 'a lot of money'...

I can add 60 quid for mobile phone. And that is pretty much it. I dont use my car, I dont want to bother myself with broadband to save 5 quid a month... Any other practical advice ?

[maxima]

Right down to how much of your Oyster Card you can claim back.

Wow! I already broke the law! I claim 100% of my monthly tube ticket. I dont use it for my personal purpose so I wont buy it anyway... Good lord. Need to pack my suitcase. I am so going into jail!