New to Contracting

[MacBoy]

My brolly costs me about £60pcm, not sure you can get a full year's worth of (decent) accountancy for that. That includes my FYR all liability insurances etc

.

But surely BYJ, you pay much more in tax and deductions having made the decision to go permanently 'under the brolly (albeit as a trade off to what you perceive to be a less-stressed existence)'? So, apart from the 'hassle factor', I don't quite see how you're winning here

[TheBigYinJames]

Fine, after all you make your own decisions. You are still giving away 20% of your gross by acting as though you are inside IR35, but without the 5% discount and you're paying someone else for the privilege.

No, I still get 71% of my gross rate back via my brolly, and I used to run my Ltd years before there was an IR35, and no way did I manage to get 91% I reckon I am losing no more than 5-10% doing what I'm doing, for much less stress and no paperwork.

EDIT: Just checked May's invoice and a straight (cash into my personal account) / (invoiced minus VAT) comes to 77.1% for the month, obviously this includes some expenses, but those would be common to whatever way I operated anyway.

So I don't reackon I'm missing out on a great deal of money.

Some people enjoy the stress and paperwork, more power to them.

[lambrini_socialist]

No, I still get 71% of my gross rate back via my brolly, and I used to run my Ltd years before there was an IR35, and no way did I manage to get 91% I reckon I am losing no more than 5-10% doing what I'm doing, for much less stress and no paperwork.

EDIT: Just checked May's invoice and a straight (cash into my personal account) / (invoiced minus VAT) comes to 77.1% for the month, obviously this includes some expenses, but those would be common to whatever way I operated anyway.

So I don't reackon I'm missing out on a great deal of money.

Some people enjoy the stress and paperwork, more power to them.

must be a lot of expenses! when i was with Parasol, a normal invoice without exes would be paid at 58% of gross minus vat. they charged me £104 per month, slightly more than my accountant does now. and they were far from stress-free - on occasions their computer would make an alarming "correction" and pay me a couple of hundred quid less than i was expecting, i had to make a series of increasingly obnoxious phonecalls and threatening emails just to get someone from Parasol to actually bother to talk to me and offer even a basic explanation of what was going on. it was this aspect of using a brolly - the lack of control, call center numpties and opaque accounting - that prompted me to go Ltd., rather than the tax savings. of course the tax savings are bloody marvelous too ;-)

[Integrity]

You should make "Writing a Business Plan" one of your first activity, and include a variety of information including suggested names for your business, route to market, even if one of the items on this list includes using agents to make your telephone calls and organising meetings. Other areas include:
Brand Design
Brochure Design
Website Design
Standard Terms of Business
Business address if you want to setup a physical or virtual office.
Professional Indemnity Insurance

Show how the first client will be won, and when funds will be available to support additional business development.

If you want your business to be a vehicle for payment, and classified as a personal service company, you can ignore everything in this message.

[VectraMan]

No, I still get 71% of my gross rate back via my brolly, and I used to run my Ltd years before there was an IR35, and no way did I manage to get 91% I reckon I am losing no more than 5-10% doing what I'm doing, for much less stress and no paperwork.

You must be on a low enough rate to stay out of the upper limit to get that much back. I think I was missing out about 15% when I was with Parasol, and that was a pretty modest rate too. And as for paperwork, I still had to sort out timesheets once a week and expenses at the end of the month, so it's not like it's paperwork free. Doing the same with a limited is only slightly more work.

But it's up to you. I think if I was certain I couldn't dodge IR35, I'd go back to Parasol and close the Ltd. because then it isn't worth the extra hassle.

[ASB]

No, I still get 71% of my gross rate back via my brolly

Assuming your brolly is operating PAYE correctly - and there isn't really any other viable payment method - then that implies gross billings of around the 20,000 mark.

Even so outside IR35 you could improve retention from about 14,000 net to about 17,000. Of course the comfort of the brolly could well be worth that.

[TheBigYinJames]

You must be on a low enough rate to stay out of the upper limit to get that much back.

Combination of average rate (300pd) and reasonably high expenses (90 miles drive each way) at the moment. My percentage is not always as high as that, but it tend to average out around the 70% mark.

If I was on a 500 a day gig working from home, then the money lost would tempt me back into Ltd.

[TheBigYinJames]

Assuming your brolly is operating PAYE correctly....Of course the comfort of the brolly could well be worth that.

/me points to the banner ad at the top of the page...

Yes as I've explained elsewhere, as a veteran of a 90s tax investigation which ruined my life for almost a year, I prefer the easy life these days. Even if it means I lose some income.

[EvilWeevil]

When setting up your company bank account it is quicker to physically go into the bank branch and set up the account. Just phone up the bank and ask what documentation you need first before you pay a visit.

If you don't like the bank you are using or find a better banking deal you can always move your account later.

Don't be tempted, as I was, by Alliance and Leicester's offer of free business banking.

1. It's not that good a deal anyway - most of the major banks will do something similar.
2. They are utterly inept. After 6 weeks, they still hadn't sorted anything out. So I went to my local branch of Lloyds, and they set it all up in a week. Meanwhile, A&L still haven't noticed I told them to f-off, and occasionally send me crap.

[VectraMan]

So I went to my local branch of Lloyds, and they set it all up in a week.

I'll also vote for Lloyds. For plan-B Co. I just walked in to ask what I needed and to make an appointment, but ended up doing everything to setup the account there and then (though still had to wait a week for it).

Plan A Co. I'd gone for one of those setup a company including a bank account deals, which ended up being a bit of a mare of several trips to the local branch so they could send off details to the other branch, and all in all was a lot more difficult than just dealing with the local branch.