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Contracting Advice

markysimmo

markysimmo

Johnny nice-tits
I’m currently in a contract Inside of IR35
It’s looking increasingly like my next contract will be outside of IR35

I know I will have to set up my own company and pay myself as it is
I know I will pay myself a small salary each month and then dividends from my business account
I will be able to claim for a lot of work expenses too

Anybody here got experience of this and have any tips/advice for what to do/what not to do

I’ve heard its a simple process to set one up, I’m sure my accountant will help me too
 
You are running a company Mark. You will have to be organised but it’s not necessarily onerous. Lots of interaction with hmrc for vat submissions and submitting accounts and being careful with your cash flow, tax liabilities and separation of company money and your own (They are not the same).

You’ll also register a payroll with HMRC and will have it submit a self assessment if you are not already.

Also remember to keep extra back for year 2 etc as you will end up paying an advance on the tax due within the tax year.

It’s also easy to wind it up and if you have less than £20k you can take the capital out as a capital gain rather than income…

I had a good accountant.
 
Thanks I have a good accountant too so by the sounds of it will be leaning on them a fair bit
 
The Knowledge centre is fantastic
Once I get a contract I’ll give them a call
Looks like they do pretty much everything for you which is what I want really
 
@Bedfordspurs another question how did you used to pay yourself from the company account
Do I just pay myself the salary net from my business account to my personal account ?
 
markysimmo said:
@Bedfordspurs another question how did you used to pay yourself from the company account
Do I just pay myself the salary net from my business account to my personal account ?
Click to expand...
Inside or outside
Outside I actual took a basic pay of something like £1000 a month taxed as paye
Then took dividends periodically
Paid vat quarterly and tax annually in arrears
 
Bedfordspurs said:
Inside or outside
Outside I actual took a basic pay of something like £1000 a month taxed as paye
Then took dividends periodically
Paid vat quarterly and tax annually in arrears
Click to expand...
Outside, my Umbrella sorts out my PAYE on my Inside
I did see about paying yourself the a small salary under the tax allowance threshold
When you say periodically would you do one every 3 months or so or could you do it regularly ??
 
markysimmo said:
Outside, my Umbrella sorts out my PAYE on my Inside
I did see about paying yourself the a small salary under the tax allowance threshold
When you say periodically would you do one every 3 months or so or could you do it regularly ??
Click to expand...
I did it regularly as in monthly
But it seems it’s frowned upon
 
All much easier done annually if you have the savings cushion, I find. A monthly payroll system for directors is a PITA.
 
markysimmo said:
Outside, my Umbrella sorts out my PAYE on my Inside
I did see about paying yourself the a small salary under the tax allowance threshold
When you say periodically would you do one every 3 months or so or could you do it regularly ??
Click to expand...
You can pay yourself a regular dividend as long as your Company profits (less corp tax commitments) can cover it. You must leave enough money in the account for operating capital for future outgoings.

If things are pretty simple it is not hard to judge this (ie how much profit you are running at after tax and costs) especially if you don't have irregular or massive costs. Just leave a buffer, and at year end it'll all be tied up by the accountant. You'll then be owed the balance of dividends not paid/claimed.
 
Yeh if I get the contract I want I know how much it pays and roughly how much I can pay myself each month/2 months leaving the rest for tax and any other costs etc
 
Bedfordspurs said:
I can send you you a spreadsheet with that on…
If I can find it
Click to expand...
The guy mentioned they will tell you to the penny how much of your wages you can withdraw each month
I liked the sound of a lot of what they do
Expenses are nice and easy too
 
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