Reply to: Autumn Statement 2016

[teapot418]

Pay it from the personal income from the contract and claim the relief through your SA return for a guess.

Nope, it says that pension payments can be deducted before calculating PAYE. What's not very clear is exactly where the Employers NI comes from - if the engager is paying it (i.e. your rate is reduced accordingly) you're unlikely to get that back. If the engager is deducting it on your behalf and paying it for you, then you might.

[DaveB]

Does anyone know how you pay into a pension out of this public sector farce. With the new drawdown rules seems the best way to save some extra dosh up.

Pay it from the personal income from the contract and claim the relief through your SA return for a guess.

[Gibbon]

Pensions

Does anyone know how you pay into a pension out of this public sector farce. With the new drawdown rules seems the best way to save some extra dosh up.

[mudskipper]

Draft legislation was supposed to have been published yesterday but I've not found a link to it yet. Anyone?

https://www.gov.uk/government/public...at-rate-scheme

[TheCyclingProgrammer]

Is there any clarity on the "goods" test for FRS?

I thought I read in CUK the goods test would be revealed on 5th Dec - have I missed something?

There seems to have been a few updates to here:

https://www.gov.uk/government/public...technical-note

Unless I'm mis-remembering, this stuff seems new:

Goods must be used exclusively for the purpose of the business - this means that you must not include the cost of any goods that are used in full or in part for your own private use. For example, printer ink and stationery that are used for both your office and your home would not be included. It would also exclude goods acquired with the intention of giving them away or donating them to a third party.

Would seem to exclude some people's clever ideas of buying stuff to sell onto others just to get around it but of course, its yet another case of the government introducing a stupid new rule, realising how easy it would be to get around it and trying to prevent abuse by adding yet more rules, which are likely to be utterly unenforceable.

Also, it would seem that buying hardware and choosing not to capitalise it in your accounts is going to be a non-starter too, because the definition of capital goods is the one used for VAT purposes, regardless of your accounting treatment:

Examples include equipment such as a computer, mobile phone, office furniture, a tablet or a printer, even if they are not necessarily treated as capital assets for accounting purposes. The legislation that describes capital expenditure goods can be found in VAT Regulations 1995, 55A (1).

Draft legislation was supposed to have been published yesterday but I've not found a link to it yet. Anyone?

[ContractorBanking]

Is there any clarity on the "goods" test for FRS?

I thought I read in CUK the goods test would be revealed on 5th Dec - have I missed something?

[youngguy]

How do brolly fees stack up against costs for accountancy, insurances etc? As a very rough estimate these come out to around £2,500 pa for me.

Around £25-30 per week you invoice, depending on the company I believe .

[lucyclarityumbrella]

I'm an equal opportunities eliminator in that respect

[jamesbrown]

I will let you off then!
True, but as your legal employer we have an obligation to make payment to you (if the brolly is acting compliantly based on the Contract of Employment), plus we handle the credit control so you have no issues in chasing up payments. I would say as long as the contractor does their research and uses a "decent, reputable brolly" that has been around for a decent amount of time, then their money should be in safe hands!

Sure, but this isn't an advertising board, it's a forum for contractors to improve their understanding. FWIW, I've always recommended CU, in the past, when someone wasn't ready for, or capable of, running a Ltd. When someone is ready, it's good practice to eliminate as many links in the chain as possible, including all brollies and agencies I'm an equal opportunities eliminator in that respect

[lucyclarityumbrella]

In the interests of balance, it's also worth bearing in mind that an umbrella company is another link in the chain that can fail, so even if it's cost neutral when the 5% allowance and FRS profit is gone, it isn't risk neutral. This is a general observation, not a specific one aimed at CU.

I will let you off then!
True, but as your legal employer we have an obligation to make payment to you (if the brolly is acting compliantly based on the Contract of Employment), plus we handle the credit control so you have no issues in chasing up payments. I would say as long as the contractor does their research and uses a "decent, reputable brolly" that has been around for a decent amount of time, then their money should be in safe hands!

[jonnyboy]

Agreed. And with no bias or view one way or the other... I am always personally sceptical of a person or company which says "better of or the same going through us" - if this was true, how does the person or the company stay in business if they don't make any money? And if they do make money, where does that money come from?

[jamesbrown]

In the interests of balance, it's also worth bearing in mind that an umbrella company is another link in the chain that can fail, so even if it's cost neutral when the 5% allowance and FRS profit is gone, it isn't risk neutral. This is a general observation, not a specific one aimed at CU.

[lucyclarityumbrella]

Can you show us your calculations?

If you let me know your hourly or daily rate I can show you - or simply go to our umbrella calculator and it will show you the breakdown.

Nothing hidden from this end, so you will see the taxes etc and as I mentioned our weekly or monthly margin will cover a £20m insurance package for you, plus don't forget you get statutory entitlements as an employee that you wouldn't through your own Ltd company.

[jonnyboy]

How do brolly fees stack up against costs for accountancy, insurances etc? As a very rough estimate these come out to around £2,500 pa for me.

Really??!?!? Yikes. My costs are currently:

Accountants = £80pm = £960. I use freeagent (no costs for me) so accountants cost is for checking things through, year end sign off, questions, etc
Insurance (stat) = £350. For the mandatory twin insurance
Insurance (opt) = £299. This is for QDOS tax insurance

Thats £1609 (excluding VAT) - what else is in your £2,500??

[DaveB]

When the mentions of the Public PSC legislation was bounded around in the round-table events at HMRC, there was still a perceived benefit of Ltd with the flat rate scheme, and the 5% expenses, but it appears the removal of these would mean operating through a Ltd gives no added bonus over umbrella. At least going umbrella means your insurances are covered and you have no paperwork hassle other than timesheets. If you know anyone in this situation, feel free to mention us

How do brolly fees stack up against costs for accountancy, insurances etc? As a very rough estimate these come out to around £2,500 pa for me.