Totally confused about setting up a company

[steve1875]

Hi All,

I've had stats and illustrations thrown at me all day on how much money I can save via setting up a limited company with this and that provider but this is my first time so I desperately need some help on what to look out for and any recommended firms.

Also, how does National Insurance and student loan repayment fall into this?

Are these online "contractor calculators" trustworthy?? I suspect not...

From someone way out their depth - Appreciate the help.

Steve

[NotAllThere]

I've moved your question to a more relevant area, and given a more reasonable subject. "Help" is a bit vague...

[northernladuk]

Have a good read of the First timers guides on the right and see if becomes any clearer. Have a look at the search method described in the Welcome section and search for some of your specific questions ad well. The area you are struggling with is the easy bit.

[Clare@InTouch]

Student loan repayments will go through your tax return, and be paid in a lump sum each 31st Jan along with your tax. This is assuming you take a low wage, being low enough that HMRC cannot collect the loan through your salary.

Any NI will be collected through your wages, as it is now. The difference is that the Employer is a company you own shares in. The amount of NI depends on the wages you take, which depends mainly on IR35.

I'd recommend you give a few accountants a call and see who you get on with, and who explains things in a way you understand. Don't judge by fee. The difference in the main players is marginal really, and it's the advice that you really need to understand. A good accountant will be worth their fee in tax saved.

And listen to NLUK - he talks sense even when he's a grumpy toad

[Wanderer]

Also, how does National Insurance and student loan repayment fall into this?

I don't know, to be honest. It's probably best if you have a talk to an accountant about your specific situation. You are going to have to do a load of research, the first timers guide is a good start which may be helpful.

Have a look through the forum, some accountants advertise and/or post here so you can contact one for a chat and tell them you found their details here. They all seem pretty friendly. Have your P45/P60 ready and get an accountant to talk you through it.

Are these online "contractor calculators" trustworthy?? I suspect not...

Some are, some aren't. If you have a student loan or it's not 6th April (beginning of the tax year) then it's difficult to know exactly how much tax you will pay because it will depend on your personal circumstances.

Alternatively, an easy option is to get going with an Umbrella company because it's pretty much hassle free though you will pay more tax.

[Craig at Nixon Williams]

The 'contractor calculators' should give you approximately the same answer as every accountant is working with the same legislation - if one is vastly different from another ask the accountant why this is. The chances are that these calculators will not factor in your student loan (ours doesn't).

A point about student loan payments on dividends - once your earnings exceed the repayment threshold they are payable at 9% of the taxable dividend (gross dividend), which works out at 10% of the dividend that you actually receive (net dividend).

As Clare has said, a good way to select your accountant is to see which can explain everything to you in a way that you understand, so give some a call!

Hope this helps!
Craig

[Jessica@WhiteFieldTax]

The 'contractor calculators' should give you approximately the same answer as every accountant is working with the same legislation - if one is vastly different from another ask the accountant why this is. The chances are that these calculators will not factor in your student loan (ours doesn't).

A point about student loan payments on dividends - once your earnings exceed the repayment threshold they are payable at 9% of the taxable dividend (gross dividend), which works out at 10% of the dividend that you actually receive (net dividend).

As Clare has said, a good way to select your accountant is to see which can explain everything to you in a way that you understand, so give some a call!

Hope this helps!
Craig

I was about to say the same as Craig about calculators - none of us can write our own tax legislation, so if the variables entered are the same, the answers should be as well. Like Craig, we don't easily factor SLR into calculations, there is a trade of between complexity v clarity.

Some good advice on here already , good luck

[steve1875]

Everyone, really appreciate the input here. Some great answers.

Clever Account and parasol - Does anyone have any experience of these firms or heard of any positive/negative feedback??

Thanks in advance,
Steve

[ASB]

Everyone, really appreciate the input here. Some great answers.

Clever Account and parasol - Does anyone have any experience of these firms or heard of any positive/negative feedback??

Thanks in advance,
Steve

Lots of stuff about parasol. Search, but the facility isnt too good. I find google search and /site:xx xxxx the best way.