Reply to: Invoicing Agency POST Inside IR35 via Limited Company

[lucyclarityumbrella]

Sounds about right, if that's how they are operating it - on our calculations the £425 per day gives ERs NI of around £46 per day assuming you are on a standard tax code.

[ntdmr]

It is looking more and more likely I am going to go down the umbrella route for ease of use, and had a chat with Lucy, but in the meantime, this was the latest I got when I questioned the "reduced rate"

My current rate is £425 per day.
"Effective from 1st April 2017, you will need to invoice us at the new daily rate of £375.38 per professional day + VAT as we are not legally permitted to deduct Employers NI from you therefore the rate reduction is in effect to account for this cost that we have to pay to HMRC. We will then take the gross of the invoice excluding VAT and calculate and deduct the relevant income tax and employees NICs. You will receive both a remittance for gross and a payslip showing the net + VAT from ourselves."

[5000]

Apologies if this has been asked before, I tried to search but didn't find anything.

My current contract within the public sector runs out at the end of March, although I have had an offer to renew on a higher rate to offset the change (if my calculations are correct!).

My agent has told me if I want to continue through my Limited Company I need to invoice them my day rate minus 13.8% and 0.5%.
e.g £500 - 14.3% = £437.45.

Is this correct way? I am confused about the £8112 EmployERs NIC allowance? When is this taken into account? Or will this come back automatically via a HMRC rebate? Obviously I don't want to over pay my EmployERs NIC!

Finally charging VAT.
I believe I can continue to carry on charging VAT which will be on my full day rate (e.g. £500)? How would I pay myself the 3.5% (20%-16.5%). Does this have to go through my own companies PAYE?

Thanks

Do the deemed payment calculation and add on top of normal amount

[225c]

Off-Payroll – The Nitty, Gritty - Contractor Weekly

Useful article with examples.

[northernladuk]

Lucy has already sent me an email and will have a chat with her tomorrow.

Not interested in any of the 80% umbrellas - I spoke to one who explained how it worked with loans and indemnities and decided to stay well clear! Sounded like Jimmy Carr's accountant!

Thank you all for your help!

Very wise..

[ntdmr]

Lucy has already sent me an email and will have a chat with her tomorrow.

Not interested in any of the 80% umbrellas - I spoke to one who explained how it worked with loans and indemnities and decided to stay well clear! Sounded like Jimmy Carr's accountant!

Thank you all for your help!

[northernladuk]

Well good news - it's basically gone from April as the rate for virtually all contractors goes up to 16.5%

Proper Ray of sunshine you ain't ya lol.

[SueEllen]

I use the flat rate VAT scheme. I like that extra 3.5% that comes back to me.
I am trying to maximize my take home pay inside IR35.

Well good news - it's basically gone from April as the rate for virtually all contractors goes up to 16.5%

[northernladuk]

Thanks!
I am starting to think umbrella is the way to go with this going forward! Hopefully can find the cheapest one I can?

Don't do that. Find the best one. 'Cheap ones' or ones offering 80%+ retention are potentially costing contractors their houses at the moment.

I'd also recommend ContractorUmbrella but I'd be picking up the phone. Demand to speak to Lucy and tell them Teapot418 sent you

[LondonManc]

Thanks!
I am starting to think umbrella is the way to go with this going forward! Hopefully can find the cheapest one I can?

Correct. Pre-April, VAT would earn you £13 a day on a £500 rate, after April it's £1 a day. That's purely at its basic, without factoring it into the overall structure of your company's financial accounts.

[ntdmr]

ContractorUmbrella is recommended round these parts. I don't have first hand experience, but Lucy, their MD posts here, so worth giving them a call.

Thanks, just filled in the "request a callback"

[teapot418]

My agent is recommending Giant or Parasol. I also believe my accountants offer one.
Open to recommendations / will look through these forums.

ContractorUmbrella is recommended round these parts. I don't have first hand experience, but Lucy, their MD posts here, so worth giving them a call.

[ntdmr]

Personally I'd go with an umbrella with a good reputation, rather than the cheapest

My agent is recommending Giant or Parasol. I also believe my accountants offer one.
Open to recommendations / will look through these forums.

[teapot418]

Thanks!
I am starting to think umbrella is the way to go with this going forward! Hopefully can find the cheapest one I can?

Personally I'd go with an umbrella with a good reputation, rather than the cheapest

[ntdmr]

Pay back at 16.5% of 1200 = £1980

Therefore £20 comes back to you.

Thanks!
I am starting to think umbrella is the way to go with this going forward! Hopefully can find the cheapest one I can?