Reply to: Is contracting in the UK becoming to much of a PITA?

[scooterscot]

Yep. And this 24 months in one place thing... Various bits of Europe I've been in allow even permies to claim travel and lunch costs against tax.

My German account was baffled why I insisted on a business account. He understood the need for a separate account to make life easier, but why on earth in the name of a business that you don't really need? I had to agree, madness.

[2BIT]

Yeah, like having to live in some austere, bland German town to flog what remains of any niche skills you once had.

WHS

[doodab]

My accountant offers me an online site and I just plug the numbers in every couple of months which takes 10 minutes, I dump the company mail in a box when it comes through and check it on occasion. At the end of the tax year I cross check everything and send a cheque off. I get a new PC maybe every 2 years on the company the odd camera and it pays the phone bill and a server I have.

Yeah, I am basically the same except I post stuff and pop in to see my accountant face to face.

The thing is there is a heavy reliance on the accountant to make sure all the necessary paperwork is done correctly, which sounds fine until you remember that the buck stops with you and ignorance isn't an excuse if anything is missing, which means you need to keep on top of the various regulations in order to be able to sanity check what the accountant is doing.

[minestrone]

That's his point. Even a £100 printer has to be treated as capex and depreciated over several years.



It could be a lot simpler. Particularly stuff like paperwork for divvies, IR35 status etc is overly complex and I would argue that the somewhat artificial nature of ltd co structure to some extent actually encourages people towards more outright tax evasion strategies. Accepting contractors & freelancers were self employed would save a lot of work on both sides.

No doubt there are valid concerns that some people might be forced into "self employment" to avoid employers giving them employment rights, but this should be dealt with by targeting the businesses concerned.

My accountant offers me an online site and I just plug the numbers in every couple of months which takes 10 minutes, I dump the company mail in a box when it comes through and check it on occasion. At the end of the tax year I cross check everything and send a cheque off. I get a new PC maybe every 2 years on the company the odd camera and it pays the phone bill and a server I have.

The contractor quibbling tax laws about stuff over 5k is out of context.

[doodab]

What would a contractor buy that is over 5k? Said in a William Shatner 'What does God need with a starship' way.

That's his point. Even a £100 printer has to be treated as capex and depreciated over several years.

I spend less than 1% of my company income on accountant fees, I get phoned constantly for work offering multiples of the average UK wage and probably spend less time doing my accounts over the year than the average permie does doing appraisals.

PITA? Seriously?

It could be a lot simpler. Particularly stuff like paperwork for divvies, IR35 status etc is overly complex and I would argue that the somewhat artificial nature of ltd co structure to some extent actually encourages people towards more outright tax evasion strategies. Accepting contractors & freelancers were self employed would save a lot of work on both sides.

No doubt there are valid concerns that some people might be forced into "self employment" to avoid employers giving them employment rights, but this should be dealt with by targeting the businesses concerned.

[minestrone]

Indeed. I have written to my MP more than once about all the overcomplex accounting and tax rules which are quite unecessary for a very small private company. For example, WTF is the point of differentiating capital from other expenditure if equipment is worth less than 5k? Or at all for a one man contractor company that nobody else is going to buy.

What would a contractor buy that is over 5k? Said in a William Shatner 'What does God need with a starship' way.

I spend less than 1% of my company income on accountant fees, I get phoned constantly for work offering multiples of the average UK wage and probably spend less time doing my accounts over the year than the average permie does doing appraisals.

PITA? Seriously?

[Sysman]

My UK Ltd company requires a mammoth amount of red tape to operate.

Operating as a freelancer in Germany requires me just to keep a profit / loss excel sheet, nothing else!

It seems madding to me a freelancer/contractor need a Ltd company to operate in the UK.

Yep. And this 24 months in one place thing... Various bits of Europe I've been in allow even permies to claim travel and lunch costs against tax.

[Sysman]

Indeed. I have written to my MP more than once about all the overcomplex accounting and tax rules which are quite unecessary for a very small private company. For example, WTF is the point of differentiating capital from other expenditure if equipment is worth less than 5k? Or at all for a one man contractor company that nobody else is going to buy.

Indeed. You can't really sell a company that is based purely on your own skills.

Time and again when discussing tax with other business owners I was told that with my level of turnover I should be self employed rather than having a Ltd Co. I started out as self-employed and it was an awful lot easier to organise, and cheaper too, especially at the beginning when cash flow was tight.

Got back all the stuff about the govt being commited to cutting red tape, improving clarity etc. Naturally F All has been done. The country is run by lawyers and accountants, anything that reduces business for either has no chance of becoming law. The govt also has a vested interest in complexity as most people do not grasp what a huge amount they are paying in addition to the figure on their payslip.

More than once I had to correct mistakes made by lawyers and accountants.

[scooterscot]

My UK Ltd company requires a mammoth amount of red tape to operate.

Operating as a freelancer in Germany requires me just to keep a profit / loss excel sheet, nothing else!

It seems madding to me a freelancer/contractor need a Ltd company to operate in the UK.

[doodab]

If you have to leave the country to find work you tend not to get to pick the city you live in. I'm in agreement with Minestrone, I don't find it a hassle at all and easier in fact than most other countries.

Go ahead and neg me again you fooking old woman.

Will do.

[oracleslave]

If that were one of the alternatives I would take it. Except I would live in one of the many vibrant world class cities that consistently score highly in surveys of most liveable cities / most desirable places to live.

If you have to leave the country to find work you tend not to get to pick the city you live in. I'm in agreement with Minestrone, I don't find it a hassle at all and easier in fact than most other countries.

Go ahead and neg me again you fooking old woman.

[doodab]

Yeah, like having to live in some austere, bland German town to flog what remains of any niche skills you once had.

If that were one of the alternatives I would take it. Except I would live in one of the many vibrant world class cities that consistently score highly in surveys of most liveable cities / most desirable places to live.

[minestrone]

To me no, you can set up a company with a phone call and be contracting in days, accountants are cheap in this industry and I have never had any tax problems. I earn loads more than permies and only work half the year to get substantially more than any of my friends earn. No complaints.

[oracleslave]

The only reason I can see to bother with it is that the alternatives are all far worse.

Yeah, like having to live in some austere, bland German town to flog what remains of any niche skills you once had.

[xoggoth]

Indeed. I have written to my MP more than once about all the overcomplex accounting and tax rules which are quite unecessary for a very small private company. For example, WTF is the point of differentiating capital from other expenditure if equipment is worth less than 5k? Or at all for a one man contractor company that nobody else is going to buy.

Got back all the stuff about the govt being commited to cutting red tape, improving clarity etc. Naturally F All has been done. The country is run by lawyers and accountants, anything that reduces business for either has no chance of becoming law. The govt also has a vested interest in complexity as most people do not grasp what a huge amount they are paying in addition to the figure on their payslip.