What are the best options?

[tim123]

Just tested a few online calculators and it literally doubles the amount of tax that i would have to pay. Based on what the accountant has told me and these sums that i have just done, PAYE would incur more tax than going ltd, even with the accountants annual fees inlcuded.

Thanks for the suggestion btw, at least now i can rule out PAYE.

You misunderstand the system.

Whether you are PAYE or not, the amount of tax you will have to pay is going to be about the same. It just creates a difference in whether it is deducted at source before you see the money or collected later by HMRC when you fill in you tax return. There will be a small amount of extra ERNI to pay with the PAYE route.

tim

[hevy]

Yes, it is in their best interest.

How much PAYE tax would you incur on extra £15k ?? Work it out. Weigh it against the cost of running a Co and extra Paperwork and Tax returns to fill in (assuming you don't fill one now).

Finally, let us know what you decide?

Just tested a few online calculators and it literally doubles the amount of tax that i would have to pay. Based on what the accountant has told me and these sums that i have just done, PAYE would incur more tax than going ltd, even with the accountants annual fees inlcuded.

Thanks for the suggestion btw, at least now i can rule out PAYE.

[PAG]

You see thats what i thought. It's hardly any work for the accountant and i would have little or no expenses, but he has a fixed price of £750 per annum. The actual sum of money is on the low side and thats why i am trying to look into other options. Guess i should speak to a few other accountants, but i kind of expect them all to say the same things and that is to create a limited company, it's in their best interest...

Yes, it is in their best interest.

How much PAYE tax would you incur on extra £15k ?? Work it out. Weigh it against the cost of running a Co and extra Paperwork and Tax returns to fill in (assuming you don't fill one now).

Finally, let us know what you decide?

[hevy]

£15k per year is on the low side and the admin overhead and cost of a limited company would seem a bit heavy. I would expect most accountants would probably give you a small discount for low turnover (although I have yet to meet such an accountant personally), but the expect to pay up to £500-£1000 +VAT per year for the privilege of being a fully fledged Director of Red Tape!!

If you are earning a decent day rate, then the accountancy cost and red tape is worth the bother!! The accountants on these forums should give you a more balanced perspective.

You see thats what i thought. It's hardly any work for the accountant and i would have little or no expenses, but he has a fixed price of £750 per annum. The actual sum of money is on the low side and thats why i am trying to look into other options. Guess i should speak to a few other accountants, but i kind of expect them all to say the same things and that is to create a limited company, it's in their best interest...

[AnotherIan]

I can't comment on the per annum cost, but a ltd company can be set up for peanuts. Go to Companies House and they offer incorporation for 20 quid of 15 for doing so online.

Do talk to the accountants though, there are other costs which they can explain.

[despot]

£15k per year is on the low side and the admin overhead and cost of a limited company would seem a bit heavy. I would expect most accountants would probably give you a small discount for low turnover (although I have yet to meet such an accountant personally), but the expect to pay up to £500-£1000 +VAT per year for the privilege of being a fully fledged Director of Red Tape!!

If you are earning a decent day rate, then the accountancy cost and red tape is worth the bother!! The accountants on these forums should give you a more balanced perspective.

[Troll]

Hi everyone

I have a permi job and have recently been offered two contracts to work as a freelancer in spare time.

Both contracts would equate to around £15k per annum in total.

Should i set up a limited company, or trade as a sole trader? Pardon my ignorance, but i really don't know what would be the best solution.

Thanks
hevy

Setup Ltd company
Sub the work out to the Indians - Bob Shawadiwadi is good

HTH

[Cowboy Bob]

Give one of the resident accountants on this forum a bell, they are much more likely to have the answers regarding contracting than your average local accountant.

Contact Alan at Nixon Williams, Simon from SJD or Darren from Uptons - a search of the forum should get you the details.

[hevy]

I went to see an accountant today who suggested that i should create a limited company. He totally disregarded the sole trader option.

He says the cost for registering is £165 and has quoted me £750 per annum for his services. I did say that it is only two cheques a month, but that makes no difference apparently.

Is that a fair rate to charge?

He gave me little or no information on what would be the best option for me.

I had to ask about expenses, partnerships and he really wasn't forthcoming with the information that i was after. He reckons on £15k and about 3k in expenses i should be looking at around 2k in tax. Does that sound about right to you guys?

Would really appreciate a your feedback

Cheers

[hevy]

Hi everyone

I have a permi job and have recently been offered two contracts to work as a freelancer in spare time.

Both contracts would equate to around £15k per annum in total.

Should i set up a limited company, or trade as a sole trader? Pardon my ignorance, but i really don't know what would be the best solution.

Thanks
hevy