Help.... lost...tax....aaaagh contractor/permanent

[SpontaneousOrder]

When i changed from permie to contracting I was in credit for the year, as far as tax/ni was concerned - based on my new salary.

So to keep it simple I just paid myself a couple of grand extra each month until the credit was small (looking at my tax dashboard on hmrc website), and then did a quick rough calculation to figure out how much my last month of the year should pay in salary in order to arrive just above a zero credit. I undershot by about 100 quid - so the additional tax was very little.

Obviously I could have just paid my new low salary and got a rebate, but I couldn't be arsed and enjoyed the extra cash.

[Crossroads]

Have to agree with the above. Get a grasp of the basics and use an accountant to confirm the key points and take care of the details.

Its scary how many long term contractors I speak to who have no idea whatsoever.

[WordIsBond]

I'd disagree with most of the advice here. I'd say spend a couple days reading everything in the first timers guide and the other guides on the sidebar. THEN find an accountant. You are more likely to find an accountant you'll be happy with if you actually know a little bit of something about what you are doing and what you are looking for, what an accountant should cost, etc, etc, etc.

Then you'll have a much better idea of whether you want the responsibility of a Ltd co or whether you want to go umbrella. Which can be a big factor in choosing an accountant, too.

If you don't want to be bothered with educating yourself on running a contractor business, getting an accountant isn't going to solve your problems, and it is brollie for you.

[Intel]

Engage an accountant asap, you can't do this this on your own or ask random strangers on a forum.

Get this wrong and Hector (the Tax Inspector) will rip you a new arsehole.

Or alternatively, don't. It's always nice to have someone with their head higher above the parapet than mine where the tax man is concerned.....

Seriously though, get yourself and accountant. Any accountant worth their salt will save you more money each year through VAT FRS and tax planning than they cost.

[JonNorris@Crunch]

Engage an accountant asap

Emphasis on the ASAP, from the sounds of things.

[stek]

Hi,

I have paid tax and ni on job that i was made redundant from in this tax year, i am starting to do some contractor work in the same tax year. i am reading that i will pay 2 lots of ni one as employer and one as employee amounting to approx 25% plus my tax which seems a lot and a little unfair, my problem is im unsure how much money i can use from contractor earning to ensure there is enough left in the account for the tax man. i would appreciate a conversation with someone who could shine some light on my situation.

Bonus question.... can i just withdraw as dividends (ensuring i leave 20% for hmrc) seeing i have already paid NI this year through my full time job i was made redundant from?

Thanks

Engage an accountant asap, you can't do this this on your own or ask random strangers on a forum.

Get this wrong and Hector (the Tax Inspector) will rip you a new arsehole.

[northernladuk]

Hi,

I have paid tax and ni on job that i was made redundant from in this tax year, i am starting to do some contractor work in the same tax year. i am reading that i will pay 2 lots of ni one as employer and one as employee amounting to approx 25% plus my tax which seems a lot and a little unfair, my problem is im unsure how much money i can use from contractor earning to ensure there is enough left in the account for the tax man. i would appreciate a conversation with someone who could shine some light on my situation.

Bonus question.... can i just withdraw as dividends (ensuring i leave 20% for hmrc) seeing i have already paid NI this year through my full time job i was made redundant from?

Thanks

Where is VAT in all this? You have considered VAT yes?
You know you can only pull dividends from profit?

Umbrella is the way for you.

[DaveB]

Ring a few of the recommended accountants on here and have a chat with them about your circumstances. They will be happy to outline what you need to do without commitment to signing up with them. Choose one you are happy with.

If you dont get it right you could end up facing a sudden, and rather large, tax bill.

[LondonManc]

Go brolly until the end of the tax year and then form your own company.

[NotAllThere]

Go brolly, give them your P45 from the last job and let them work out what is what and you pay them for the privilege.

And give them control of your fees... but still better than screwing up your taxes.

btw - why do you think it's unfair? When you were employed NI was deducted from your salary, and your employer paid their share. Now you employ yourself through your own ltd company - why should it be any different?

[SimonMac]

Go brolly, give them your P45 from the last job and let them work out what is what and you pay them for the privilege.

[TheFaQQer]

You'll only need to pay NI on salary - so if you've already paid enough this year to count as a qualifying year, then you don't need to pay salary at all (technically you never need to pay salary, but that's a different discussion).

You'll need to account for VAT (if VAT registered) and corporation tax. So knock the VAT off the invoices because that's not your money anyway. Then knock off the valid business expenses from the turnover. Then knock off 20% for corporation tax.

Or get an accountant who will make sure that I'm right and you're on the correct path. Which is much better advice than the rest of my post.

[eek]

you need an accountant

or join a proper legal umbrella and get them to handle the payments for you....

[pr1]

you need an accountant

[aafps]

Hi,

I have paid tax and ni on job that i was made redundant from in this tax year, i am starting to do some contractor work in the same tax year. i am reading that i will pay 2 lots of ni one as employer and one as employee amounting to approx 25% plus my tax which seems a lot and a little unfair, my problem is im unsure how much money i can use from contractor earning to ensure there is enough left in the account for the tax man. i would appreciate a conversation with someone who could shine some light on my situation.

Bonus question.... can i just withdraw as dividends (ensuring i leave 20% for hmrc) seeing i have already paid NI this year through my full time job i was made redundant from?

Thanks