urgent help required deciding how best to cope with recent work/tax etc.

[catboy]

hi all,

i have been working for almost 3 months on a direct programming contract but i am not set up as a limited company. i recently moved back to the uk from abroad and didn't set one up as i was so busy. the money has been going straight into my personal bank account and i'm now thinking i really need to work out how i'm going to pay tax.

what is the quickest/easiest way? i haven't charged vat on my day rate as i am not vat regged etc.

should i go as a sole trader/self employed? i'm not entirely sure what to do to be honest and would like a good solution where i'm going to not pay *too* much tax but also one that is easily going to be sorted out.

i am in the process of forming a ltd for future contracts.

thanks in advance!

[malvolio]

hi all,

i have been working for almost 3 months on a direct programming contract but i am not set up as a limited company. i recently moved back to the uk from abroad and didn't set one up as i was so busy. the money has been going straight into my personal bank account and i'm now thinking i really need to work out how i'm going to pay tax.

what is the quickest/easiest way? i haven't charged vat on my day rate as i am not vat regged etc.

should i go as a sole trader/self employed? i'm not entirely sure what to do to be honest and would like a good solution where i'm going to not pay *too* much tax but also one that is easily going to be sorted out.

i am in the process of forming a ltd for future contracts.

thanks in advance!

As far as I know it's personal earned income, so you have to pay normal PAYE and NICs on it. What you can't do is move your income to date and reclassify it is company money retrospectively. You also have the slight problem that you haven't been paying PAYE/NICs, which isn't actually legal.

I think you need an accountant, quickly. No doubt one of the locals will be along with some qualified advice, but my best guess is to get in with one of the better umbrellas and pay a chunk of back tax to catch up to where you should have been.

If you want to maximise your income, then Limited Co is the way to go for your next gig. The current one needs sorting now.

As for "too busy" to sort out your income - that's just pathetic. We're supposed to be professionals.

[stek]

As far as I know it's personal earned income, so you have to pay normal PAYE and NICs on it. What you can't do is move your income to date and reclassify it is company money retrospectively. You also have the slight problem that you haven't been paying PAYE/NICs, which isn't actually legal.

I think you need an accountant, quickly. No doubt one of the locals will be along with some qualified advice, but my best guess is to get in with one of the better umbrellas and pay a chunk of back tax to catch up to where you should have been.

If you want to maximise your income, then Limited Co is the way to go for your next gig. The current one needs sorting now.

As for "too busy" to sort out your income - that's just pathetic. We're supposed to be professionals.

Surely in this case self-employed is better given he's gone direct with no agency? Bit of a mess mixing with personal account but a bookkeeper will sort that, any money taken out as income is just accounted for as drawings, to be taken into account when accounts are prepared.

[malvolio]

Surely in this case self-employed is better given he's gone direct with no agency? Bit of a mess mixing with personal account but a bookkeeper will sort that, any money taken out as income is just accounted for as drawings, to be taken into account when accounts are prepared.

Maybe, but the big gap in my financial knowledge is how Schedule D works in reality: don't you have to declare yourself as S/E before you banking the money? But, as you say, it is a way to resolve the issue.