Reply to: Setting up company and composites having read the postss

[IR35 Avoider]

1) Accoutant £1200

Factor the flat rate VAT scheme into your calculations. Even though I work part time, I make over a thousand a year profit from the flat rate VAT scheme, which goes a long way to offsetting the accountancy bills for my company.

[tim123]

Ok

So I thought about the costs of using LTD and am laying them out in yearly figures:

1) Accoutant £1200
2) Accountant costs for dispenses £??? e.g. doing your reciepts etc.
3) Public and professional liability and personal indemnity insurance £300
4) IR35 contract review £100
5) IR35 contract insurance for expenses £200
6) Setting company up with Companies House £100?
7) Time spent doing the above £???

Total cost is about £1900.

Giant is 35*52= £1820.

Are my figures wrong / way off?

Thanks,

Chris

1) You should get an accountant for a lot less than 1500, including the cost of (2).

2) You still need PII when working through an umbrella, though they may include this.

3) (4) and (5) are effectively double counting. Working through an umbrella you will be taxed as if you were inside IR35. You can run a limited and be taxed inside IR35 and hence save costs (4) and (5) if you wish. Alternatively you can pay (4) and (5) and (hopefully) save some tax.

4) (6) is a one off cost, barely worth considering as relevent. The amount that I paid for my company has amounted to about 3 pounds pa.

4) Yes (7) is a pain. I don't believe all these people that say it takes them minutes a month. It takes me several hours. But it has to be done.

tim

[hattra]

If you are already into higher rate tax for the year , it may be better to go for your own ltd and retain some of the profit into the next year. But I'm not an accountant, so don't take that as advice. Might be worth posting this on the Accounting/ Legal thread, or possibly on some other sites equivalent (though I'm sure they are not as good )

[christhedon]

The Giant solution I was looking at was the Powerhouse, where they include all the things I laid out seperately in the costs of going LTD alone.

I've just thought of something else though...I have been permanent up to now and therefore I am in a high rate income tax bracket. I think this means that I will have to pay higher dividend tax (NB I don't mean corporation tax, I mean the tax on withdrawing the dividends). Having spoken to Giant I don't think they will cater for my scenario. Is that correct? Are there Composites that will? So, I may have to go Ltd and then draw some divedends next April I.e. within the next tax year. Is this a rational approach?

Thanks,

Chris

[hattra]

I'm with Giant, using their composite option - they review all contracts against IR35, and include IR35, PI and employers insurance in the deal. I went with them because, after being on the bench for three years, I didn't want to go through all the hassle of setting up my own Ltd. only to have the contract finish after three months. I've been in nearly a year now, and found Giant good - they pay pretty fast (about a week behind), and the admin is so simple (and online). It's a good option if you're statring up, but I'll probably go back to my own Ltd (eventually).

[dmini]

My accountant is much less
Plus
vat registration - flat rate and the money you can make on that

Make sure you are comparing like for like. Is that Giant option the one that automatically pays divis. In which case - do they review the contract & check its outside IR35? - or are you expected to assume it is (and wait for HMRC to call), or pay for reviews, insurance etc yourself.
If it is the basic PAYE only option, then it is not the same as yourco, where having done all the IR35 hoops, you WOULD be paying divis

[christhedon]

So you are talking about 1500. I also just found out that some composites are charging you for employers tax. I assume you'd have to pay that as well if having a LTD?

[Pondlife]

Ok

So I thought about the costs of using LTD and am laying them out in yearly figures:

1) Accoutant £1200
2) Accountant costs for dispenses £??? e.g. doing your reciepts etc.
3) Public and professional liability and personal indemnity insurance £300
4) IR35 contract review £100
5) IR35 contract insurance for expenses £200
6) Setting company up with Companies House £100?
7) Time spent doing the above £???

Total cost is about £1900.

Giant is 35*52= £1820.

Are my figures wrong / way off?

Thanks,

Chris

1) Accountant approx £1000
Who will set up YourCo for you, do your PAYE, annual accounts etc
2) PCG mempbership approx £200 which included IR35 insurance etc
3) Discounted Prof indem ins thru PCG £201 which included EL, Pub Liab
4) Contract review £100 is about right
5) PCG Legal/tax advice line - Priceless if HMRC knock on your door.
6) Time spent doing the above is about the time it took me to write this.

HTH

[christhedon]

Ok

So I thought about the costs of using LTD and am laying them out in yearly figures:

1) Accoutant £1200
2) Accountant costs for dispenses £??? e.g. doing your reciepts etc.
3) Public and professional liability and personal indemnity insurance £300
4) IR35 contract review £100
5) IR35 contract insurance for expenses £200
6) Setting company up with Companies House £100?
7) Time spent doing the above £???

Total cost is about £1900.

Giant is 35*52= £1820.

Are my figures wrong / way off?

Thanks,

Chris

[Jack Sparrows]

If you owe banks money, use a cover ltd company like pro corporate.

If your new use an umbrella company

If your in good credit and experienced use your own ltd co.

[Mordac]

Hello,

I'm new and have spent the last few hours reading through the posts on this forum. What that has done has scared me from using a composite solution such as Giant Powerhouse and from setting up my own company as the costs seem higher than a composite solution (E.g. accountant, IR35 contract check, IR35 insurance, professional, personal, public liability insurance).

From what I can gather is that composite companies may be under heavy scrutany from the HRMC and therefore could cause them to go under and hence the members would lose they're next weeks income/months income? OR is it the members themselves could be under investigation in which case the insurance would kick in and they would be in the same position as if they were LTD with insurance in the first place?

I understand that the composites will also charge a fee that if you were LTD you would obviously not be paying. Although as mentioned above you could end up paying for those things individually?

Please could someone clear the above up in simple layman terms in terms of the risks, rewards and effort required for each choice?

Thanks in advance,

Chris

Ask yourself this. If Giant can provide all this and make a profit, wouldn't it be great if you were able to source these things yourself at roughly the same or slightly lower cost?

Clue - check out the PCG (www.pcg.org.uk) /end clue

And speaking of risk, any company which sees the money before you do consitutes a risk - that something will happen to that company while they are still holding on to money which is owed to you. The fewer companies in that supply chain, the better. Is it sinking in yet?

[Troll]

Why is everyone still so scared of IR35?, I went through an investigation that lasted 2+ years and it was obvious at the end that the Revenue (spit) were just trying it on.

Get some insurance against it and stop worrying about it

[malvolio]

Oh jeez... Read this thread - http://forums.contractoruk.com/thread7487.html

The basic point is that no matter what legal construction you use - umbrella, comp, own co, smelly little man from Isle of Man - they all use the same taxation laws and have the same rights and responsibilities. You don't pay your own company a fee, everyone else you do. Therefore, all things being equal, which is cheapest?

And if you haven't worked that out from the research you've done...

[Troll]

Hello,

I'm new and have spent the last few hours reading through the posts on this forum. What that has done has scared me from using a composite solution such as Giant Powerhouse and from setting up my own company as the costs seem higher than a composite solution (E.g. accountant, IR35 contract check, IR35 insurance, professional, personal, public liability insurance).

From what I can gather is that composite companies may be under heavy scrutany from the HRMC and therefore could cause them to go under and hence the members would lose they're next weeks income/months income? OR is it the members themselves could be under investigation in which case the insurance would kick in and they would be in the same position as if they were LTD with insurance in the first place?

I understand that the composites will also charge a fee that if you were LTD you would obviously not be paying. Although as mentioned above you could end up paying for those things individually?

Please could someone clear the above up in simple layman terms in terms of the risks, rewards and effort required for each choice?

Thanks in advance,

Chris

Do you have a lissp?

[mcquiggd]

First piece of advice, change your username as muslims will be offended, and cut your head off, leading to calls for a 'period of consultation' from John Reid.