So.. I'm considering IT contracting

Anyone use one of those payroll companies that promise 80%+ take home?

Are they any good?

Cheers

You are probably better off just finding a decent accountant I would have thought, I don't really see what these companies offer?

are you planning on doing it long term or short term?


If short term, then go with umbrella.


If long term, then consider setting up your own limited company.


If long term on crap money, then stick with an umbrella.
Less than £15 stick with umbrella, over £25 go limited
anything in between its up to you....

If you go limited, then get yourself a good accountant.


If you go limited, consider going Vat registered - Flat Rate scheme if you want.


Flat rate scheme for IT contractors is 14.5% - its worth while because you effectively get an extra 5.5%
you charge VAT (20%) & give the Vat Man 14.5% & you keep the other 5.5% - the idea behind it is its less complicated than full VAT.
Ideal if you dont spend much money out where you pay VAT. My biggest VAT outgoing is Fuel! so Flat rate works for me.
You also get 1% discount in your first year.


Any Capital Goods purchases over £2000, you can claim the VAT back, as long as it is on a single receipt. - For example, If your business bought an Imac 27" £1450. Now If you spend another £550, then you can claim the vat back. Effectively getting the £550 item for £150! - so lets go for an ipad air 2, 64 gb with wifi & cellular for £579 = £2029, you claim back the vat (£330), and the actual 27" imac & 64gb ipad has cost you £1690


Then there are options of companies cars, taking dividends, not paying NI or Tax, etc.

its a whole can of worms.



Any umbrella offering you to keep 80% of your earnings is lying!
They will basically lead you into making false expense claims, etc. Things like Staying in a hotel up to £50 a night with no receipt,  Breakfast subsidence up to £5 with no receipt, overnight subsidence (toothpaste, soap, evening paper, etc.) up to £5 with no receipt, dinner Subsidence upto £15 with no receipt -  can easily add up to £100 in expenses per day with mileage & no proof of receipt is required by the umbrella company.
Which is fine as long as Mr HMRC doesnt do a tax inspection on you - because if they do, they will want to see them receipts.... and may question why you are staying in a hotel when you only live 20 miles away.

as above. ive been contracting for 5 years.
good accountant costs me 72 a month. so long as he saves me more than that im happy. he does my vat, you corp tax and all paye stuff.

i work, invoice, get paid and spend it.

it might only be 2 hours a month, but i know how lazy i am once i get home, so this way i know it gets done on time and is unlikely to get inspected.

Quote from: Eggtastico on November 07, 2014, 17:00:39 PM
Flat rate scheme for IT contractors is 14.5% - its worth while because you effectively get an extra 5.5%
you charge VAT (20%) & give the Vat Man 14.5% & you keep the other 5.5% - the idea behind it is its less complicated than full VAT.
Ideal if you dont spend much money out where you pay VAT. My biggest VAT outgoing is Fuel! so Flat rate works for me.
You also get 1% discount in your first year.

He's right on most of it, but he's lying to you on this bit. You charge 20% to your customers, and then pay 14.5% on the entire turnover including VAT. So you pocket less than 5.5%.

A quick example.

You charge 100 + VAT @ 20% = 120.
You pay VAT @ 14.5% on the entire flat rate turnover. So 14.5% of 120 = 17.40.
Your "profit" is 2.60, so 2.6%

Well worth having, but the sum isn't quite as simple as Egg would have you believe.

Also, I use freeagent and do all my accounts myself. Costs me 25 quid a month. If you want a signup let me know, we both save 10%. But you have to be comfortable submitting accounts, but most of it is online these days. I probably know more than most accountants to be honest, since I do my accounts, my mates accounts, my dads accounts and my wifes (inc USA). Most accountants are just idiot old men living in 1960.

Quote from: Sam on November 15, 2014, 22:23:11 PM
He's right on most of it, but he's lying to you on this bit. You charge 20% to your customers, and then pay 14.5% on the entire turnover including VAT. So you pocket less than 5.5%.

A quick example.

You charge 100 + VAT @ 20% = 120.
You pay VAT @ 14.5% on the entire flat rate turnover. So 14.5% of 120 = 17.40.
Your "profit" is 2.60, so 2.6%

Well worth having, but the sum isn't quite as simple as Egg would have you believe.

Also, I use freeagent and do all my accounts myself. Costs me 25 quid a month. If you want a signup let me know, we both save 10%. But you have to be comfortable submitting accounts, but most of it is online these days. I probably know more than most accountants to be honest, since I do my accounts, my mates accounts, my dads accounts and my wifes (inc USA). Most accountants are just idiot old men living in 1960.

hmm didnt realise that. Spose its logical when you think about it.
TBH I use solar accounts & spits out my VAT return when  I ask for it.


I think Im going to look at free agent. Dunno if I can be bothered to put in 8 months worth of books though... maybe Ill try it start of my next tax year.

Remind me in February :oP

Sam - send me the details for discount. Thinking about it - why wait another 6 months - when it can save me £500!

What's your email and I'll send you the invite.

pm'd

Anyone else who signs up, put down 42z7icz3 as your referral code. Then we both get 10% off.