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Back to basics in contracting

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    Back to basics in contracting

    Hello All,

    I've been doing contract work for a number of years now and not really very up to date with the best way to operate a company. In the past I have used PAYE, umbrella, composite companies and even down the EBT route.

    EBT worked well for me at the time, but obviously it's quite a hot topic on how you get stung later!!

    I only ever set out to do contract work for a short period until the 'right' permanent job came up, but during this time, I've realised that maybe I like being self employed and wish to continue down this path for more years to come.

    Can somebody offer some helpful hints on how I 'may' want to operate?

    I typically work at customer sites and am required to travel by train or car (Normally at least 30 miles from home). As an IT professional (project manager), typically, my expenses are low as I own a laptop and a copy of MS Project, but do need to do training course from time to time.

    My partner also does the occasional bit of contract work, so in an ideal world, It would be handy to subcontract jobs to her so that she doesn't need to use an umbrella etc, but this isn't the highest priority (it's all about me really!).

    Whilst I have read the stickies on here and I do understand the pro's and cons of each, I don't really appreciate which of these suits my scenario.

    I didn't like the fact that when I used an EBT I couldn't claim expenses, but on the other hand, my expenses are relatively low, so am not sure if going the full way and starting my own company makes financial sense.

    Essentially, I want to be tax efficient, low risk (not get a slapping later like EBT reputedly can do) and most importantly, legal!! I also don't currently have a pension, so would want to possibly consider this also.

    Any advice or pointers would be greatfully received!

    #2
    And you're actually a PM....?



    Go Limited. It's not that arduous, it's reasonably simple, its the msot tax efficient in all sorts of ways and it keeps you out of the clutches of the AWD.

    Anything else and either you're paying people to give you (some of) your own money or you're at some degree of risk from a mendacious government.
    Blog? What blog...?

    Comment


      #3
      LOL I can smell some flaming coming on here.. mainly around the fact you are asking this question after contracting for a number of years????? The fact you havn't chatted to other contractors about this or just listened to them I find surprising.

      Anyway... LTD company is the best way to go if you are going to give it a fair pop. You have possibly already wasted a sizeable amount of dosh by not looking in to this sooner

      You will also want an accountant as well I guess. He will guide you through a lot of what will now be your responibility where the Brollies did it for you before.
      'CUK forum personality of 2011 - Winner - Yes really!!!!

      Comment


        #4
        Originally posted by northernladuk View Post
        LOL I can smell some flaming coming on here.. mainly around the fact you are asking this question after contracting for a number of years????? The fact you havn't chatted to other contractors about this or just listened to them I find surprising.
        So the sum of your advice is:

        1. You're going to get flamed
        2. Get a LTD
        3. Get an accountant

        Wasn't really worth much was it.

        Getting a "good" accountant to ask for advice isn't necessarily a great solution either. I don't know where people find these mythical "good" accountants but what if they tell you to go with a loan scheme, dodgy off shore EBT, you shouldn't income split or whatever? Do you blindly follow their advice? Nope, you come along to a forum and try and get some opinions. It's slightly more anonymous than asking your work colleagues how they structure their financial affairs...

        DKB, if you and your partner are fairly close financially then you could set up a company with both of you as share holders, both work through the same company and split the dividends between you.

        You would have to think carefully about the long term if you did this. If you owned a house and/or had kids together then you are probably fine. Otherwise you may be best to consider a LTD by yourself.
        Last edited by Wanderer; 16 March 2010, 00:49.
        Free advice and opinions - refunds are available if you are not 100% satisfied.

        Comment


          #5
          You need a Ltd Co and a SIPP for the Ltd Co to pay into. Having a contracting partner is, IMO, the ideal scenario to maximise the benefits of Ltd Co working.
          Public Service Posting by the BBC - Bloggs Bulls**t Corp.
          Officially CUK certified - Thick as f**k.

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