Newbie questions about IR35 and expenses

[borat99]

Hi all

Am currently permie and about to take the plunge into contracting for the first time. My plan is to go ltd. Few questions -

1) With regards to IR35, would people always recommend getting a professional to review contracts? How much does this cost? How likely is it that the taxman will want to check up on contracts (are there any figures on how many ltd co they hit a year and is it just random?). If he does order a review, will that be only on the current contract or do they usually look back at everything you have ever done?

2) Regarding expenses, I am looking at a contract in London and I live far enough away that I will need to stay down at least 3 nights a week. Can I claim for a short term let rather than hotels, and if I do that, does it compromise my ability to claim back train tickets a couple of times a week? Also, does the agency / person I rent from need to be vat registered to be able to provide a legit receipt?

3) Regarding accounting - as I would be starting late in the tax year, what implications does this have on costs of the accountant and on tax? Also, can anyone recommend a good accountancy and give me an idea on annual costs?

A lot of questions for a first post I know Thanks in advance for any advice!

[pmeswani]

Hi all

Am currently permie and about to take the plunge into contracting for the first time. My plan is to go ltd. Few questions -

1) With regards to IR35, would people always recommend getting a professional to review contracts? How much does this cost? How likely is it that the taxman will want to check up on contracts (are there any figures on how many ltd co they hit a year and is it just random?). If he does order a review, will that be only on the current contract or do they usually look back at everything you have ever done?

2) Regarding expenses, I am looking at a contract in London and I live far enough away that I will need to stay down at least 3 nights a week. Can I claim for a short term let rather than hotels, and if I do that, does it compromise my ability to claim back train tickets a couple of times a week? Also, does the agency / person I rent from need to be vat registered to be able to provide a legit receipt?

3) Regarding accounting - as I would be starting late in the tax year, what implications does this have on costs of the accountant and on tax? Also, can anyone recommend a good accountancy and give me an idea on annual costs?

A lot of questions for a first post I know Thanks in advance for any advice!

To answer your first question... we wouldn't recommend an amateur to review your contract. In terms of cost, you need to shop around. There are a few companies that use this board that may be able to help. In terms of investigations.... always assume that you will be investigated, regardless of whether you are in or out of IR35.

To answer your second question... when you go contracting via your own limited company, you will need to arrange dispensation. Speak to an accountant who specialises in IT Contracting (go to the PCG site and dig around there for info, look at the home page on this site.... etc).

To answer your last question.... it doesn't matter if you start on the first day of the calendar year or the last day.... speak to an accountant, make sure you register for PAYE, submit your P45 to whoever is doing your accounts and work out whether you should take a PAYE salary or a dividend.

The morale of the story... speak to an accountant, get your contract reviewed by an IR35 specialist..... Read as much information on this site and the PCG site and don't make the same mistake a lot of contractors make... be prepared BEFORE you go into contracting.

[Bluebird]

To answer your first question... we wouldn't recommend an amateur to review your contract. In terms of cost, you need to shop around. There are a few companies that use this board that may be able to help. In terms of investigations.... always assume that you will be investigated, regardless of whether you are in or out of IR35.

To answer your second question... when you go contracting via your own limited company, you will need to arrange dispensation. Speak to an accountant who specialises in IT Contracting (go to the PCG site and dig around there for info, look at the home page on this site.... etc).

To answer your last question.... it doesn't matter if you start on the first day of the calendar year or the last day.... speak to an accountant, make sure you register for PAYE, submit your P45 to whoever is doing your accounts and work out whether you should take a PAYE salary or a dividend.

The morale of the story... speak to an accountant, get your contract reviewed by an IR35 specialist..... Read as much information on this site and the PCG site and don't make the same mistake a lot of contractors make... be prepared BEFORE you go into contracting.

1.If you think you are inside or outside it's worthwhile getting a contract review, if then you are OUTSIDE get the insurance to go with it.
2.You don't need dispensation for a Ltd company - just keep your reciepts.
3. Tax Year is a personal thing, you if you have a Ltd it's the "company accounting year" thats relevant - which is usually 12 months after your incorporated.

as iwth everything - get yourself a decent account, read the guides and you can't go too far wrong...

[ratewhore]

Never had a contract reviewed. Probably never will. I won't need to for TLC35 either.

Waste of cash IMHO (caveat: as long as you know what needs to be in there), but each to their own...