Inside IR35. Why choose an Ltd versus an umbrella?

[malandri]

Sjd

OldGeezer, are you happy so far with SJD? I take it that you are running an Ltd, i saw SJD have umbrella service as well

[oldgeezer]

Hi Malandri,
Yes, been with them 2 years as a Ltd co. They charge £88.13 a month and I'm sure I don't use them as much as I could do, or am entitled to as I rarely need to make contact, other than for the quarterly and annual returns. When I have wanted advice or an opinion, they seem well clued up and I've not had any cause for complaint. I think they offer an umbrella payment scheme or if you prefer a Ltd Co. you can still show sales(invoices) as inside-IR35 or outside IR35.
When I first started I was a bit concerned there seemed to be a lot I had to do myself, i.e keeping track and recording all company sales , expenses etc (as I had previously worked via Parasol) but very quickly found it all worked out a lot easier than first thought.
The best thing for me having a Ltd Co. is the scope to widen my net of customers and have full control of the money coming in to the company. I also registered for flat rate VAT scheme which has reduced the amount of VAT I pay the customs and excise, though it depends on how much you purchase as you cannot reclaim any VAT. There are of course loads of other pros and cons that the esteemed members of this forum could come up with.

[Taxman]

Hi Malandri,
Yes, been with them 2 years as a Ltd co. They charge £88.13 a month and I'm sure I don't use them as much as I could do, or am entitled to as I rarely need to make contact, other than for the quarterly and annual returns. When I have wanted advice or an opinion, they seem well clued up and I've not had any cause for complaint. I think they offer an umbrella payment scheme or if you prefer a Ltd Co. you can still show sales(invoices) as inside-IR35 or outside IR35.
When I first started I was a bit concerned there seemed to be a lot I had to do myself, i.e keeping track and recording all company sales , expenses etc (as I had previously worked via Parasol) but very quickly found it all worked out a lot easier than first thought.
The best thing for me having a Ltd Co. is the scope to widen my net of customers and have full control of the money coming in to the company. I also registered for flat rate VAT scheme which has reduced the amount of VAT I pay the customs and excise, though it depends on how much you purchase as you cannot reclaim any VAT. There are of course loads of other pros and cons that the esteemed members of this forum could come up with.

Remember under the Flat Rate Scheme that you can still obtain full VAT relief on the purchase of individual assets that cost £2,000 or more (inc VAT).

Ridiculous as it sounds, a piece of equipment costing £2,000 or more can end up costing considerably less than a much cheaper piece of equipment.

At an exact cost of £2,000, the net cost after VAT relief would be £1,702. In simple terms, if you intend spending between £1,702 and £2,000 on a piece of equipment, you'd be better off upgrading to a more expensive item as it will ultimately cost less.

Strange but true.

[boredsenseless]

Remember of course that this is only possible on goods over 2000, if the thing you wish to buy is a service i.e. 10 days at 300 from a limited company consultant then this isn't covered by this reclaim option and you'll have to foot the bill out of your pocket

[oldgeezer]

Good advice if purchasing items valued over £2K and claiming back the VAT even though my company's registered under the flat rate VAT scheme.. thanks 'Taxman' & 'boredsenseless'.

[Taxman]

Remember of course that this is only possible on goods over 2000, if the thing you wish to buy is a service i.e. 10 days at 300 from a limited company consultant then this isn't covered by this reclaim option and you'll have to foot the bill out of your pocket

Fair point boredsenseless. I did indeed quite correctly use the word 'asset', but in retrospect it was good that you made a point of enforcing the difference between an asset and a service. Well said BS.