Reply to: Contracting through Composite Company (first timer)

[shippwreck]

Cool, thanks

[Pondlife]

Wife/GF is perfectly acceptable as Co Sec. Doesn't have to take a salary or divs either.

[shippwreck]

Ok, i have one last question before i actually pay the money to get it all setup... company secretary???

Now i know what the role is and all that, but just wanted to check there were no adverse implications of this being my wife... as she actually has a very good job at the moment. I have asked her to check here employer is ok with it but i wanted to check there were no other implications. She wouldn't collect a salary at all and SJD said that she wouldn't have any shares...

[winx]

He was recommended to me..

What's interesting is that he says that the scheme he is suggesting has the same risks (but not all the benefits!) than running my own ltd and possibly using my partner (who has no income) to receive a salary as a secretary or dividents and then accumulate the rest of the money within the company to use the taper relief in a couple of years.

Anyway, SJD have been very helpfull when speaking with them and I've already made up my mind..

[malvolio]

Although my current accountant suggests moving with an EBT scheme I find it way too risky.

OK. so who is this clown? If he is recommending to a new and inexperienced client that they should use a scheme that has been outlawed in the UK , he should not be practising.

[winx]

Hi all,

I also would like to thank most of the people posting here..

I guess I'll be moving on with SJD as it seems the most reasonable option!
Although my current accountant suggests moving with an EBT scheme I find it way too risky.

I've only been contracting for 6 months in the UK but I think my own ltd will give me more benefits in the future an ofcourse the peace of mind,

Cheers!

[shippwreck]

Hey Guys,

Right, i am about to sign up with SJD as after speaking to them i feel much happier with them... plus they don't have a tie in at all and work out cheaper even though they charge for setting up the company!

So hopefully by the end of today i'll have my own limited company! I'm also going to sign up with PCG as that also seems like a sensible option.

I'd like to say thanks to all you guys for the advice you've given me... i probably would have come to a much less informed decision without you and i have also mentioned this place to some friends who also are thinking about this route... I'll be around more i reckon, probably asking some other newb questions, but for the moment i feel like i know just enough to be in control (possibly rather a false sense of control) but hopefully that will change as i progress and no doubt my knowledge will increase... but for the moment i feel like this:

LOL, cheers guys

[Nixon Williams]

There is nothing wrong or risky with paying dividends each month, provided you do so from profits.

Any good accountant (no plug intended!) will be able to sort all this for you with very little input from yourself, afterall that is what you are paying them for!

Alan

[Spacecadet]

Try SJD

costs about £25pw (actually £75 per month + VAT) and they are very good

[shippwreck]

Ok... after doing ALOT of reading this afternoon... i have come to the conclusion that composites are... well... risky to say the least. From what i have been reading they will be targeted in the future and even if the contract itself appears to be outside of IR35 the fact that your operating through a composite goes heavily against you in those cases and you leave yourself wide open to risk.

So this leads me to Umbrellas... which haven't been coming out as particulary good in terms of net to gross ratio... which makes me think that having my own limited company would be best... even if i did only have the one 16 week contract!

So that brings me to a meeting i had yesterday with a guy from First Option. He said that they were an accountancy firm that only deal with limited companies. He said that for £25 per week they setup the company and act as your accountant. You have full control over everything and keep all receipts etc... You get all the Tax benefits and they will look over your contract to give their opinion on IR35 compliancy, or for £90 they can get a lawyers firm to ok it. At the time it seemed like a lot of work for what might only be 16 weeks... but now it seems like it would be the safest way against IR35 failings and probably most profitable way too. They don't charge to setup or close down your limited company but there is a 6 month tie in... all though he said if you ceased trading before that tie in the weekly fee would reduce to £5 which would mean at worst that would be an extra £40 down the drain.

Now i acknowledge that you don't need an accountancy to manage your own business... you just need one to check the books at the end of the year... but these guys also set up the business for free (that's around a £200 saving, am i right?) and ensure it is all above board and payments are made correctly which would seem like a sensible precaution for a first timer!

So i guess my next question would be have you heard of First Option and do you have any warnings about them???

Oh he also said that he advised i pay myself a sensible wage that i could live off and pay dividends to myself quarterly as technically your not supposed to live off dividends and that makes it look better to the Tax Man... Now thats fine as my wife earns almost enough on her own to cover mortgage and bills etc so all i would really need is the minimum wage, but it sounded like a sensible precaution.

[shippwreck]

And good luck - welcome to the real world.

LOL, don't i know it... my head is hurting from all this research!

As for expenses... yeah i completely agree, i think it was my Father that told me that in his opinion people that have large subsistence expenses but no reciepts are just waving a bright red flag to the IR and asking to be investigated... plus it just doesn't feel right to claim something your not actually getting... you know!

I'll ask about PCG's QU umbrella when i ring Parasol...

Thanks again

[malvolio]

Rumour has it that JSA are stright but just not very efficient: that can be worse than them being, ermm, "bent" shall we say, if you miss a deadline or they screw up your payments. I don't know, I don't use umbrellas, but there are enough examples quoted on this board to make you wonder.

Also do not ignore PCG's QU umbrella, which is run by Parasol. That is one that will definitely not rip you off, and yo get free PCG membership thrown in (or vice versa, depending on your point of view...). Parasol and CU are also entirely straight with their clients.

Do not rely on HMRC's advice about anything: theior advice on IR35 is actually wrong anyway. Read the real first time guides here and on www.pcg.org.uk and understand them. Do not use a composite, you don't yet know enough to make a judgement.

Read the threads about expenses all over the forums here, but the rule is if you don't spend it, don't claim it. We don't pay you to go to work or eat out.

And good luck - welcome to the real world.

[shippwreck]

Hi,

I understand why you say avoid Giant as they seemed a bit fishy... even to a novice like me...but why avoid JSA... i'm going to give Parasol and umbrella a call to see what they say, but i was wondering why you were saying avoid JSA as they seemed very proffesional. They were doing things like checking the contract was IR35 compliant and requiring receipts for everything (bar mileage).

Please don't get me wrong... you guys have a lot more experience than me with these things and I acknowledge that... i was just wondering what the reasoning behind the statement was ... if you know what i mean.

[Robot]

“Now it is a 16 week contract and I honestly couldn't say whether or not I will continue contracting after this one”

“They had all the answers but they said that the only expenses i could claim were travel and subsistence”

Can you really claim your travel and subsistence ?

From another thread (Umbrella Sticky !)

And it's also necessary to add: If you only do one placement through any one umbrella, there is a (noticable) risk that the revenue might consider you are *not* a 'worker temporarily working at a remote site' at all and disallow all expenses.

[Mordac]

Yes, sorry, in my haste to warn you away from Giant & JSA, I forgot to mention them.