Worth starting a ltd company inside IR35?

[Bluebird]

As had been said on many, many treads before.


YOU CAN ONLY CLAIM EXPENSES FOR EXPENSES WHICH HAVE BEEN INCURRED AND YOU HAVE GOT A RECIEPT FOR - ANYTHING ELSE IS FRAUD.

[facboy]

who said anything about being under PAYE?

expense dispensations bring no tax benefit. it's just a way for the umbrella to reduce their paperwork. contrary to what people may tell you, an expense dispensation does not allow you to claim any and all expenses without a receipt. if hmrc come knocking, you still need the receipts.

[sathyaram_s]

You mean, expense dispensation ?

but the whole point of being under an umbrella is the tax benefits it brings isnt it?

[eddiegee]

but the whole point of being under an umbrella is the tax benefits it brings isnt it? you would not get that under normal PAYE conditions.

[dr_beat]

Very informative replies on the post! Cheers guys!

[Gonzo]

Tell that to the P4 contractors; why involve an intermediary if you don't have to?

Exactly my opinion. Keep the chain as short as possible to minimise the risks.

[kirk]

Every single permie takes that risk. And even for contractors, you can say exactly the same thing for the agent and the client. When I was with Parasol a couple of years ago, they'd pay me the day they received the money from the agent. I'd be far more worried about the agent not paying than the umbrella.

Tell that to the P4 contractors; why involve an intermediary if you don't have to?

[VectraMan]

financial breakdown aside, a Ltd has got to be better on principle. With an umbrella you're relying on a company controlled by other people in order to pay you your own money - probably your entire income. Who'd take on that kind of risk voluntarily if they had a choice in the matter?

Every single permie takes that risk. And even for contractors, you can say exactly the same thing for the agent and the client. When I was with Parasol a couple of years ago, they'd pay me the day they received the money from the agent. I'd be far more worried about the agent not paying than the umbrella.

[thunderlizard]

financial breakdown aside, a Ltd has got to be better on principle. With an umbrella you're relying on a company controlled by other people in order to pay you your own money - probably your entire income. Who'd take on that kind of risk voluntarily if they had a choice in the matter?

[westredd]

thanks guys, very helpful

[Robot]

Im currently under an umbrella company and they do my head in. I want to get out of them. They charge £120 a momth as well.

Im thinking of starting a limited company for my IT contract work, but im not sure if I will fall insdie IR35 or not. Probably shuld really fall inside when I think about my role.. Is it still worth going ltd for this? (inside IR35)

thanks

Yes- 5 reasons

VAT flat rate profit
5% allowance – you may make a small profit!
The bank interest belongs to your company – Not the umbrella company.
Accountancy fees will be cheaper than the £120 you are paying now.
You should be able to reclaim travel and subsistence.

In addition, you will have access to the company funds; you do not have to pay anyone for a same day payment (well other than the normal bank charge)

[Old Greg]

Yep - I assumed my contract would be within IR35, but I had it reviewed and it's not.

[VectraMan]

You'd probably be better off with a Ltd., but to be honest if it was me I might feel that it wasn't worth the extra hassle. That's if you can find an umbrella you trust of course.

Don't assume you're inside IR35 though.

[westredd]

Im currently under an umbrella company and they do my head in. I want to get out of them. They charge £120 a momth as well.

Im thinking of starting a limited company for my IT contract work, but im not sure if I will fall insdie IR35 or not. Probably shuld really fall inside when I think about my role.. Is it still worth going ltd for this? (inside IR35)

thanks