Accountants and Insurance

[cartlidgea]

Don't be such a penny-pincher. You either want to run your own company or your don't. If the only reason you want to go limited is because it's a couple of quid cheaper than being an umbrella employee then good luck to you when HMRC come calling...

Oh mate this is so un true whenever I look at what drives people on this site to advise whether to go limited or umbrella they always state as the first thing the percentage increase of salary take home from working as a limited company rather then umbrella.....we are all in it for the money

[oraclesmith]

Thanks guys. I think I have been wasting my time. My contract is 7 months long if I go umbrella I lose 2.2K so straight away I thought I should go limited. But now after working out that my IR35 cover, PI, PL and EL insurance along with my accountant will come to 2K for the year (as my accountant wants full payment even though I will only use him for 7 months) (PI,EL,PL £317+vat) + (Qdos full cover £325+£35+Vat) + £1300 + vat accountant it seems either way I am stuffed. Before I wasnt taking into account the VAT so it was worth it now I realise it is not. As I was going to use the flat rate tax scheme I cannot claim the VAT back either so it makes way too expensive and not worth the small gains for all the extra work. I want a cheaper accountant but if I go with a big name like you suggest I run the risk of being dragged down as an msc.

Don't be such a penny-pincher. You either want to run your own company or your don't. If the only reason you want to go limited is because it's a couple of quid cheaper than being an umbrella employee then good luck to you when HMRC come calling...

[Sockpuppet]

My understanding from discussion with my accountant is that there are two possible scenarios:

1) The company pays a lower rate (e.g. 10p) per mile for the use of the car, and the company pays for all expenses relating to the running of the car (e.g. insurance, servicing, new tyres, magic trees etc)

2) The company pays a higher rate (e.g. 40p) per mile for the use of the car, but may not pay for any other expenses relating to the car as described above.

The usual warnings apply about myself not being an accountant and this not being solid advice. Speak to your own accountant to get the full picture.

Not accurate.

If you did 1 then the company would have to own the car on which you'd pay BIK on it. Or if you paid for the balancing etc then you'd pay BIK on that.

[cartlidgea]

Thanks guys. I think I have been wasting my time. My contract is 7 months long if I go umbrella I lose 2.2K so straight away I thought I should go limited. But now after working out that my IR35 cover, PI, PL and EL insurance along with my accountant will come to 2K for the year (as my accountant wants full payment even though I will only use him for 7 months) (PI,EL,PL £317+vat) + (Qdos full cover £325+£35+Vat) + £1300 + vat accountant it seems either way I am stuffed. Before I wasnt taking into account the VAT so it was worth it now I realise it is not. As I was going to use the flat rate tax scheme I cannot claim the VAT back either so it makes way too expensive and not worth the small gains for all the extra work. I want a cheaper accountant but if I go with a big name like you suggest I run the risk of being dragged down as an msc.

[malvolio]

My understanding from discussion with my accountant is that there are two possible scenarios:

1) The company pays a lower rate (e.g. 10p) per mile for the use of the car, and the company pays for all expenses relating to the running of the car (e.g. insurance, servicing, new tyres, magic trees etc)

2) The company pays a higher rate (e.g. 40p) per mile for the use of the car, but may not pay for any other expenses relating to the car as described above.

The usual warnings apply about myself not being an accountant and this not being solid advice. Speak to your own accountant to get the full picture.

You get 40p a mile, reducing to 25p after roughly one yer's average mileage (I know...) to pay for the purchase of the car, depreciation, lost interest and operating costs. If you want to spend it on other things, fine, but you can't then expect to claim it back again. It also keeps you out of BIK-land if challenged.

So take the obvious option.

[chicane]

4/I have my own limited company and claim milage expenses I recently had to have my car tracked and 2 new tyres on the front can I claim this back on expenses?Thanks

My understanding from discussion with my accountant is that there are two possible scenarios:

1) The company pays a lower rate (e.g. 10p) per mile for the use of the car, and the company pays for all expenses relating to the running of the car (e.g. insurance, servicing, new tyres, magic trees etc)

2) The company pays a higher rate (e.g. 40p) per mile for the use of the car, but may not pay for any other expenses relating to the car as described above.

The usual warnings apply about myself not being an accountant and this not being solid advice. Speak to your own accountant to get the full picture.

[malvolio]

1300 Sounds too high. Can't imagine what special accounting services they are offering you.


This had been discussed many times here. To see how some of the esteemed members of this forum rationally and charmingly discussed the various options and reached a conclusion on this follow the thread - http://forums.contractoruk.com/thread15020.html

Perhaps tempers got a bit frayed but the essential message of that thread was that you can pay £5k, NMW or "real" salary, depending on your conscience andn eeds without breaking any rules at all, and some more conservative accountants suggest NMW merely because future rules affecting small companies may be based on that as the cut off point. Sadly, some people cannot accept that there may be more than one truth and insist that only theirs applies.

What the forum as a whole is agreed on is that people trying to extract more than the rules allow for are either deluded or taking the michael, and will get slapped down.

[rootsnall]

Lots and lots of threads on here naming the usual accountant suspects, they charge 50-70 a month and provide a vanilla service to handle IT contractors which is all you need. There is very little in the way of creative ( and legal ) accounting that will save you much tax or NI so I wouldn't pay extra for it.

[kingshuk]

My accountant wants to charge me 1300 a year ....but I assume this is because they dont do as much for you?

1300 Sounds too high. Can't imagine what special accounting services they are offering you.

2/Part of the reason it is so high is the payroll side I am being charged £50 a month for them to calculate my PAYE/NIC. This is because they want me to pay myself a salary which is over the minimum wage / allowance so that I pay a small amount of PAYE and NIC to keep the taxman happy. Is it worth me paying myself only just over minimum wage/ my allowance so that no NIC/PAYE is needed hence I save £50 a month.

This had been discussed many times here. To see how some of the esteemed members of this forum rationally and charmingly discussed the various options and reached a conclusion on this follow the thread - http://forums.contractoruk.com/thread15020.html

[philip@wellwoodhoyle]

With your yes answer to my first question about paying too much for my accountant or that the £750 service wont cover everything which was it yes to mate, both? How much do you pay..... I am thinking it is worth paying more to use a local accountant and stay out of the MSC arguement

It is the price that varies between accountancy firms, not the type of services. Shop around and you will get the same services for less cost, just like you'll get the same services for more cost. Most contractor accounting packages cover payroll as part of the monthly fee - £50 per month for just one employee is taking the proverbial! You can buy payroll software for £50 per year, or you could use HMRC's own CD system for free.

[cartlidgea]

Definitely legitimate expenses Subsistence, milage, parking etc. And I assume and hope I can claim back the £500 I will have to spend on IR35, PI, PL and EL insurance. All honest expenses no magic trees in site...

With your yes answer to my first question about paying too much for my accountant or that the £750 service wont cover everything which was it yes to mate, both? How much do you pay..... I am thinking it is worth paying more to use a local accountant and stay out of the MSC arguement

Cheers

[Sockpuppet]

You have to somehow put the magic trees down as testing or product development.

83% is a good take home. Have no idea is £800 expenses is good. You ARE incurring £800 of legitimate business expenses aren't you.

[cartlidgea]

Cheers SockPuppet

Short but sweet

Do you think receiving a take home of £2750 from a monthly pay of £3300 or Annual pay of £39000 and expenses of £800 a month £9600 a year is a good/reasonable/lower then average take home from my own limited company using an accountant? This figure includes the £1300 accountant fees

Cheers

p.s so I can claim for the magic trees then? :->

[Sockpuppet]

1. Yes.

2. You still have to "do" payroll even if you dont pay any NIC.

3. Probably. A search could reveal more.

4. No. Wtf do you think the mileage rate your claiming covers? MagicTrees?

[cartlidgea]

I know both of these have been covered before but the search facility is not returning the exact answers im after!

1/ My accountant wants to charge me 1300 a year does this seem excessively high, this is to do pretty much everything. A lot seem to be offering their services for £750 but I assume this is because they dont do as much for you?

2/Part of the reason it is so high is the payroll side I am being charged £50 a month for them to calculate my PAYE/NIC. This is because they want me to pay myself a salary which is over the minimum wage / allowance so that I pay a small amount of PAYE and NIC to keep the taxman happy. Is it worth me paying myself only just over minimum wage/ my allowance so that no NIC/PAYE is needed hence I save £50 a month.

3/Insurance - The very cheapest PI + PL + EL insurance I can find is £317 for the lot through 360 group, has anyone found these 3 for cheaper only need 1 million cover for each

4/I have my own limited company and claim milage expenses I recently had to have my car tracked and 2 new tyres on the front can I claim this back on expenses?

Thanks