New Contractor seeks Urgent Help!

[Fleetwood]

Many of the diy contractors have probably been at it for more than 10 years having started out before the explosion in accountants et al providing taylored services.

tailored

[boredsenseless]

I do my own accounts, bar year end when I use SJD. May be expensive approach but using them gives me peace of mind and feedback in case I've done something wrong.

Many of the diy contractors have probably been at it for more than 10 years having started out before the explosion in accountants et al providing taylored services.

If I was starting out now, and only intended to do long term contracts, I would use a contractors' accountant. You fill out the supplied spreadsheets and they worry about the complicated stuff.

I did my own accounts one year as an exercise (sad I know) whilst also getting my accountant to do them as well.

He saved me well over the amount I would have paid him just because of his better knowledge of allowances and stuff.

The rule for accountants is that if they don't save you more than they cost then they cost toomuch

[BlasterBates]

Well yes its not just training, its being up to date and knowing tax. I mean you have been trained but you haven't actually done it yet. The trouble is if you get it wrong it can cost thousands either in penalties or too much tax paid, and for the sake possibly of a couple of hundred quid. The IR doesn't care that you did it yourself, if cock up you still pay the penalties.

[OrangeHopper]

> tailored

7 out of 8 letters isn't bad!

I would have got an A grade O'level with that degree of success.


Did I just see an "its"? Two no less!

[css_jay99]

thanks guys !,

I think after doing a little more digging, i find it is probably best to pay for accounting services 1st for about couple of months b4 I start doing it myself.

Since I mentioned earlier that I am a skin flint, any recommendations for cheap IT accountants that are also easy to approach and speak to ?

However more replies on the original thread questions are still welcome !
Thanks

css_jay99

[cojak]

If your accountant saves you a lot more in tax than it costs you to pay him, then he's worth it.

Wot you pays is wot you gets...

[css_jay99]

since accountants will charge VAT, I guess it is worth me resgistering for VAT as well ?.

I still need recommendations on cheap & good IT accountants

Having done more reading on IR35, it looks like a very good majority will be caught by this even me I think ?

If thats the case, does that JUST MEAN I have to account for employers & employees NIC. Does it also mean (appart from travell expenses) I can deduct a Flat rate 5% Expenses

I guess we all have the pay the piper one way or the other.

I am almost thinking of running back to perm !!
thanks

css_jay99

[Denny]

since accountants will charge VAT, I guess it is worth me resgistering for VAT as well ?.

I still need recommendations on cheap & good IT accountants

Having done more reading on IR35, it looks like a very good majority will be caught by this even me I think ?

If thats the case, does that JUST MEAN I have to account for employers & employees NIC. Does it also mean (appart from travell expenses) I can deduct a Flat rate 5% Expenses

I guess we all have the pay the piper one way or the other.

I am almost thinking of running back to perm !!
thanks

css_jay99

The only time it's worth going limited is if you are set to earn in excess of £30K (although this figure varies, depending on who you talk to) and your contract terms and working conditions sit firmly outside of IR35. That means you can legitimately pay yourself a small salary and take the rest as divis which don't attract any tax until your fees reach the 40% tax bracket. In any even you would have to pay corporation tax on the divis you do take out, but that is a lot less than paying out lower level tax and NI contributions.

If you have your own limited, but are caught by IR35 then you will have to declare all your income as salary and NI caught and still pay employers and employees NI. Divis will be regarded as tax avoidance/evasion - call it what you like. Going through a PAYE brollie is not much better, in my opinion.

If I think I am going to be caught by IR35 then I just route my work through a brolly that has set me up under him as a sole trader. This is unusual and most agencies won't allow this - but my brolly keeps it quiet and signs all the forms anyway so that the agency are satisfied. Doing it this way means I get paid gross, pay tax via SA at the end of the tax year (after keeping the money in a high interest account) and I don't have to pay employers NI. Far the best and cheapest way to be IR35 caught.

[DaveB]

since accountants will charge VAT, I guess it is worth me resgistering for VAT as well ?.

I still need recommendations on cheap & good IT accountants

Having done more reading on IR35, it looks like a very good majority will be caught by this even me I think ?

If thats the case, does that JUST MEAN I have to account for employers & employees NIC. Does it also mean (appart from travell expenses) I can deduct a Flat rate 5% Expenses

I guess we all have the pay the piper one way or the other.

I am almost thinking of running back to perm !!
thanks

css_jay99

Yes, register for VAT and get on the Flat Rate Scheme. It will save you money. Being registered for VAT also improves your standing as a legitimate business in your own right. A good accountant can tell you all about it.

IR35 is a state of mind. If you belive you will be caught then you will be. If you belive you arn't, contrary to what the IR will have you belive most peolpe arn't, then make sure the paperwork matches, it's not hard. Join the PCG and get their model contracts to work from ( As well as the free insurance ). Most decent agencies will be happy to tweak contracts to ensure IR35 is passed, just ask them to.

The most important part of IR35 though is your working practices. If you are just another bum on a seat being micromanaged and with no say in how you perform your contracted services then you are buggered.

Work to make sure this is not the case and you should be fine.

Yes we all have to pay the piper, the tight scots git. Best thing to do is just do it and dont try and take the piss. Taking the piss gets you noticed and that gets you in court.

And once you get your first contract you will wonder why the hell you didnt do it years ago. Yes the tax system is a pain, but you will earn more money, you will have more control and you wont have to worry about the endless round of pay / performance reviews, office politics and back stabbing, climbing the greasy pole and why what bastard in the op's team got promoted and you didnt.

Oh, and as for an accountant I use SJD others use Darren at 1st Accountancy - No URL cos I could'nt find it in a hurry. There are others.

[expat]

Does it (IR35) also mean (appart from travell expenses) I can deduct a Flat rate 5% Expenses?

No: the 5% is an upper limit, not a flat rate. You still have to justify the expenses.