freelance to PERMIE :frown

[lenbod]

I have been out of work for months since I finished my previous contract. Now, I feel frustrated and fed up as it is getting difficult to find any contracts especially considering the time of year. I have been thinking of going for a permanent role but need to consider the following issues about my Ltd company that I setup in April this year.

1. I haven’t paid myself salary for months as I was out of work. Is it ok to pay back the salaries to myself during this period? ie minimum wages
2. Is it worth of keeping my ltd company open if I decide to get a permie role? If I keep the company, I have to keep paying monthly accountancy fee to my accountant.
3. As I paid myself minimum wages and quarterly dividends before I was out of work, what is the min. money should I keep in my business bank account?
4. My previous contract was outside IR35. Will I get into any trouble or draw HMRC attention if I go back to permie?

I know there is a risk in contracting, but I’m just wondering how you guys can survive if you are out of work for months? I am really struggling to find my next contract. As I am a first time contractor, I would like some advice from you guys. Please help!

[max]

1. I haven’t paid myself salary for months as I was out of work. Is it ok to
pay back the salaries to myself during this period? ie minimum wages

You still employed by you LTD company. You should keep paying wages.

Also, if you are currently paying your account, why the F aren't asking them this these questions??!?

2. Is it worth of keeping my ltd company open if I decide to get a permie role? If I keep the company, I have to keep paying monthly accountancy fee to my accountant.

Speak to your accountant. I suspect you'll need to pay for the years accounts. ie: the annual fee is spread over the 12 months.

Also, if you are currently paying your account, why the F aren't asking them this these questions??!?

3. As I paid myself minimum wages and quarterly dividends before I was out of work, what is the min. money should I keep in my business bank account?

Enough to pay you taxes(vat/ct), and other bills. You're the boss, surely you have some idea of what your outgoings are.

Also, if you are currently paying your account, why the F aren't asking them this these questions??!?

4. My previous contract was outside IR35. Will I get into any trouble or draw HMRC attention if I go back to permie?

Doubt it....although if it's the same client/employer then you'd find it hard to argue.

I know there is a risk in contracting, but I’m just wondering how you guys can survive if you are out of work for months? I am really struggling to find my next contract. As I am a first time contractor, I would like some advice from you guys. Please help!

Relax, buy an xbox...enjoy the holiday. So many new contractors, flooding the market, which is been hit by the subprime problem.

[NotAllThere]

As previously noted - you're paying your accountant; ask him.

1. As a director, you do not have to pay minimum wage, usually.
2. Close your company. If you choose to keep it, as you do not have to have an accountant, you don't have to pay one. ( You need to make the annual return to CoHo, but AFAIK, that's the only cost of keeping it going ).
3. Get your accountant to work out you how much money is available to take out as a dividend on profit. If you close your company you can take out some as capital gains, and save yourself some tax.
4. Probably not. IR35 is contract (and working practices to an extent). Number of contracts, serial or parallel, is irrelevant.

how you guys can survive if you are out of work for months?

It's only happened to me twice - one 3 month, one 6 weeks. I live on the money I've earned previously. If you're not getting contracts then the chances are one or more of the following apply.

1. You're no good (but you wouldn't have gone contracting if you thought that).
2. Your rate is too high
3. You're not considering roles further away.
4. Your CV needs reworking (a good indication of this, is if you're not even getting interviews ).