Contractor pay?

[stek]

Big thanks to everyone, i think I have finally got my head round it.

Lastly, how often can i reimburse expenses to my personal account, i presume i can do it on a monthly basis?

All this talk of free money, am i correct in saying that claiming business miles may get you free money? If driving is costing you less than 45p per mile than this is effectively free money?

Not really - you are still just moving money from your limited to you no matter how much it is. It's you get 80% of it, the HMRC gets 20% of it, your Ltd LOSES 100% of it....

A motto for you - THERE IS NO FREE MONEY!

Your Ltd would get £1000 a week per your example, the most you could 'save' of that is 20% CT on profit, the rest of it is in the 325i pot, either 325l personally, or 325i Ltd.

[northernladuk]

Seriously... Go umbrella for 6 months while you learn the ropes. It might be a little more expensive for the 6 months but that is nothing compared to cocking your accounts up...

[325i]

Not really - you are still just moving money from your limited to you no matter how much it is. It's you get 80% of it, the HMRC gets 20% of it, your Ltd LOSES 100% of it....

A motto for you - THERE IS NO FREE MONEY!

Your Ltd would get £1000 a week per your example, the most you could 'save' of that is 20% CT on profit, the rest of it is in the 325i pot, either 325l personally, or 325i Ltd.

Understood, so basically this 45p per mile helps to reduce your CT bill? For example, my car costs 20p per mile but your telling HMRC that its costing 45p per mile meaning less profit and less CT.

[325i]

Seriously... Go umbrella for 6 months while you learn the ropes. It might be a little more expensive for the 6 months but that is nothing compared to cocking your accounts up...

Im hoping that is where the accountant comes in to help.

[northernladuk]

Big thanks to everyone, i think I have finally got my head round it.

Congratulations on getting your head around the most very basic accounting practice... Now on to the complex stuff....

Lastly, how often can i reimburse expenses to my personal account, i presume i can do it on a monthly basis?

Correct but incorrect.

All this talk of free money, am i correct in saying that claiming business miles may get you free money? If driving is costing you less than 45p per mile than this is effectively free money?

Only you are talking about free money. You still have to pay for the petrol you are using, depreciation on your car, extra for business insurance and we haven't even introduced you to the 2 year rule yet. What is free there.

Go umbrella.. it will save you a lot of headaches.

[northernladuk]

Im hoping that is where the accountant comes in to help.

You hit the nail on the head there.. He helps... It is still your responsibility to understand your company finances. You do know that when you run a company you are legally responsible for the finances of it. An accountant just provides you a service to help you, not run it for you. He is guided by you and gives advice. To do so little research and not understand the basics is bordering on negligent.

[stek]

Understood, so basically this 45p per mile helps to reduce your CT bill? For example, my car costs 20p per mile but your telling HMRC that its costing 45p per mile meaning less profit and less CT.

45p for the first 10k miles, then 25p.

Servicing, repairs, etc eat into that - more miles more costs - I wouldn't bank on that to keep a 325i.....

[325i]

Thank you to everyone for all the replies. I know many of the questions were basic but i thought Ill ask them on here first rather than going straight to an accountant. Know when i speak to my accoutant, at least i will have some prior knowledge on how it works.

Thanks again, much appreciated.

[northernladuk]

Thank you to everyone for all the replies. I know many of the questions were basic but i thought Ill ask them on here first rather than going straight to an accountant. Know when i speak to my accoutant, at least i will have some prior knowledge on how it works.

Thanks again, much appreciated.

Don't forget to read the guides. You have fallen over on just a few very basic concepts that are explained. You can't learn it all by falling over. Read the guides and search the forums. There will be nothing you can think of that are not covered extensively in both.

Best way to search the forum can be found here

http://forums.contractoruk.com/welco...uk-forums.html

So for example, when you want to know how much you can claim for having an office at home (yes you can!!) you would type...

claim home office site:forums.contractoruk.com in google.

And, before you ask, there is an account recommendation thread...

http://forums.contractoruk.com/accou...-requests.html

[Contreras]

Lastly, how often can i reimburse expenses to my personal account, i presume i can do it on a monthly basis?

As frequently or as infrequently as you like. Personally I reimburse expenses as a lump sum at year end to reduce the admin, but then it's just mileage and Use of Home allowance. All other legit business expenses (e.g. laptop, stationery, etc.) is charged directly on the company debit card.

All this talk of free money, am i correct in saying that claiming business miles may get you free money? If driving is costing you less than 45p per mile than this is effectively free money?

No. That's 45p less profit in the company, which after CT is 36p less dividend available to pay out to your pocket.

Unless somehow you manage to run a car for under 9p/mile* there's no free money.

Basically, what Stek said.

* on fuel costs alone you'd need to be doing 70mpg+