Outside v Inside - Expenses

[hobnob]

How did you handle any existing financial commitments? I guess I could pay back into the company via a directors loan to continue car lease & phone payments?

I'm on an inside contract at the moment, and I use director loans to dump money into MyCo to handle accountant's fees, mobile phone contract, etc. There's a balancing act: if I was going to be inside indefinitely, there'd be no point keeping the limited company going. However, if it's only short term then I think it's better to keep the limited company alive.

Regarding the car lease, take a look at this recent discussion:
Switching car lease payments from business to personal - Contractor UK Bulletin Board

[jamesbrown]

An umbrella is not going to pay your Ltd company. Your accountant is confused. It's possible that the Fee Payer (e.g., agency) could pay your Ltd company after applying a deemed direct payment (i.e., all tax deducted at source), but the reality is that they are unlikely to entertain that faff. As an aside, once a deemed direct payment has been made, there is no further tax due, so it can be extracted by whatever means you prefer with no further tax deducted (e.g., dividends). Regardless, the Fee Payer is unlikely to agree to this faff.

Regarding expenses, there are none when operating inside IR35. You are in the same position as a regular employee. By all means, if you have other contracts that are outside IR35, you can offset legitimate business expenses against profit from those.

[Rik1087]

Hi All,

Have searched, but couldn't find anything specific regarding financials.

Outside role is coming to a natural end after 2 years operating via limited, exploring new roles, and been approached with a number of inside IR35 roles with a higher day rate which almost bridge the gap.

Issue being, over the 2 years I have financial commitments now from my limited, phone, car, etc - from discussions with the accountant, he has advised its possible to go inside, via an umbrella, and the umbrella pays the Limited company. Taxes would be deducted via umbrella, and it would be treated as PAYE once in the Ltd, so withdrawing it wouldn't be classed as a dividend, and for corp tax the company would be viewed as running at a loss, so no liability there.

However, only certain expenses can be paid from the Ltd, which doesn't include a lease car for instance which is quite a large blocker.

Has anyone been in this situation, and gone through with an inside role, but attempted it via their limited? How did you handle any existing financial commitments? I guess I could pay back into the company via a directors loan to continue car lease & phone payments?

Ultimately, holding out for outside roles, but just wanted to explore plan B.

Thanks