Newbie LTD Question

[awholenewworld]

Hi All,

As the name suggests I’m new to the world of contracting. As yet I don’t have one in place but am in the process of applying for positions, in that respect I have time to set myself up right the first time.

Been looking round the forums and many have made me chuckle, please excuse me if I ask some really stupid questions or better still if you could point me in the direction of an answer if the questions has been asked before.

Right here goes.....

From what I can make out I really have 3 options for the salary / tax side of things, I’m going with the assumption I will be ‘inside’ IR35, if outside then I would consider it a bonus...

1) Ltd company
2) Umbrella
3) Dodgy take home 88% of your salary schemes

Out of the 3 I would have thought the best way route for me is to setup a Ltd company, inside IR35 Umbrella and LTD is pretty much the same ( i think), I have no experience in the tax, NI, Corp tax fields so will get a company to do all my accountancy services for me.
There are quite a few of these around, does anyone or can anyone let me know which ones they have had any dealings with, which ones seem to be the most ‘creative’ when it comes to taxes and which ones do an all encompassing service – I really want to pay someone to deal with EVERYTHING accounts, of course the monthly fee would have to be taken into account as well.

If this has been asked before please point me in the right direction...I couldn’t find it.

If anyone needs more info please let me know.

Many Thanks,

[MarillionFan]

awholenewworld you are in a queue and your post will be answered in a few minutes.

[LisaContractorUmbrella]

Unfortunately after the MSC legislation was introduced a couple of years ago, accounts can't do everything for you. Although an accountant can give you advice it will be up to you to record details of your sales and purchases, raise sales invoices, manage your company bank account, allow for PAYE and VAT payments etc etc.

To answer your other point, no accountant or umbrella company come to that can be 'creative' with regard to your tax liabilities. If you are inside IR35 your payments must be processed through PAYE and therefore your income tax and NI contributions are made according to pre-determined percentages.

[Wanderer]

Yes, you have asked some fairly stupid questions but don't worry, lots of other people have too.

I presume you have read the First Timers guide? It's very good and probably has most of the answers you seek.

A few comments about your specific questions though.

1. Don't presume you are caught by IR35.
2. Read the BN66 thread if you are interested in a how a scheme works
3. Umbrella is least hassle but you will pay a lot more in tax. see the calculators. You might want to go with one if you are definately IR35 caught and then go LTD once you have found your feet and gained a bit of confidence.
4. LTD comes with a bunch of responsibilities - you are right to get an accountant but make sure they are on the ball and you don't miss deadlines for VAT returns etc. Running the LTD is your responsibility at the end of the day. You will still have to do a certain amount of admin yourself and you will also have to understand the ins and outs of running a company.

Good luck and Welcome!

[inniAccounts]

Hi - our online software removes much of the hassle of running a ltd co, plus we can also offer you an all-inclusive accounting service. Can't link directly from CUK forums but Google us - inniAccounts.

[The Wikir Man]

1. Don't presume you are outside IR35.

Also, don't assume you are inside IR35 Read up on it, speak to people who know, have your contracts reviewed by an expert. Some people would advocate that the vast majority are outside IR35, others would argue that the vast majority are inside.

I worked on a project a few years back where all the contractors bar one deemed themselves outside IR35. They had identical working practices and contracts. The one who said he was inside did so on the "expert advice" of his accountant, who went from arguing he was outside to inside just as soon as he realized that there was a 5% expenses allowance that would cover his fees.

Good luck and Welcome!

WHS

[SueEllen]

awholenewworld this thread will tell you how to get the most out of these forums - http://forums.contractoruk.com/busin...e-newbies.html Enjoy reading and watching the info in it!

[kaiser78]

Engage an accountant asap to advise you the best way to proceed. Cannot stress the importance of this enough and is a common mistake of newbies from what we read.

[Wanderer]

Also, don't assume you are inside IR35

DOH! That's what I meant to say. I've edited it now.

Too many people roll over and presume they are IR35 caught when they could save a lot of tax if they are outside.

[awholenewworld]

Thanks for all your help, I'l be having a look at the links some of you have posted in more detail...I'll keep you updated.