Ltd vs Umbrella

[Alan @ BroomeAffinity]

Oh look what I found on this forum:

http://forums.contractoruk.com/accou...composite.html

The thread is wee bit out of date, though. Worth bearing in mind.

Go Ltd, though. That's always the advice.

[malvolio]

The thread is wee bit out of date, though. Worth bearing in mind.

Go Ltd, though. That's always the advice.

Not as far as the financials between Umbrella and Limited it isn't, at least not to the extent someone who doesn't already understand the thing would notice. MSCs are no more as far as a newbie is concerned, although rumour has it there are still some unenlightened souls providing that service.

Agree YourCo is the only sensible answer though!

[deleted0975123]

MSCs are no more as far as a newbie is concerned, although rumour has it there are still some unenlightened souls providing that service.

Agree YourCo is the only sensible answer though!

... would it be risky to use an 'umbrella structure' but is basically a disguised MSC such as DMS?

http://www.dms-london.co.uk/contractor_solutions.asp

[Alan @ BroomeAffinity]

... would it be risky to use an 'umbrella structure' but is basically a disguised MSC such as DMS?

http://www.dms-london.co.uk/contractor_solutions.asp

Yip.

Had a look at the contractor calculator and the best option (so by that I take it the DMS option) is "Salary Packaging" - doesn't tell you what it is though.

I'd go with a more transparent solution. If you can tell its a diguised MSC, then d'you reckon its beyond the tax man's abilities?

[deleted0975123]

test

[BrilloPad]

here are the calculations from DMS for a contract worth 72k:

Employer Insurances £1,635 £0
Management fees 8.5% £6,120
Trustee fees, 5% of loan £2,312
EBT Distribution (before P11D tax) £43,933
Plld loan tax, 22% of 6.25% of loan £604

they pay you a salary of 18k which is liable to both tax and NI and the charge fees for the remainder which is basically paid to you as irredeemable loan............ is it worth doing? i could end up seeing an 80% but is it worth the risk?

with montpelier you could make 83%.

[malvolio]

here are the calculations from DMS for a contract worth 72k:

Employer Insurances £1,635 £0
Management fees 8.5% £6,120
Trustee fees, 5% of loan £2,312
EBT Distribution (before P11D tax) £43,933
Plld loan tax, 22% of 6.25% of loan £604

they pay you a salary of 18k which is liable to both tax and NI and the charge fees for the remainder which is basically paid to you as irredeemable loan............ is it worth doing? i could end up seeing an 80% but is it worth the risk?

Feel free. It's illegal, but what the hell, it's you who'll go to court. Anyway, 1635+6120+2312=£10,067 in fees before you earn anything - you are pulling our leg, aren't you. now go away and try again

[BrilloPad]

Feel free. It's illegal, but what the hell, it's you who'll go to court. Anyway, 1635+6120+2312=£10,067 in fees before you earn anything - you are pulling our leg, aren't you. now go away and try again

I think only the 1635 is upfront? The others are related to amount you charge.

Though 1635 seems alot for insurance.

[deleted0975123]

test

[Alan @ BroomeAffinity]

MSCs are no more as far as a newbie is concerned, although rumour has it there are still some unenlightened souls providing that service.

I've got contractors coming over almost daily from an accountants in Middlesbrough who would appear to be operating a (thinly) disguised MSC which would appear to be run - or at least owned - by an employment business. The "accountants" had control of the bank account and paid the VAT and tax etc. At least, that's how it would appear. We haven't had a response from them yet despite asking for about a month.