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Hello folks! Managing finances as a self-employed-through-a-limited-company contractor in the UK is quite complicated, even with an accountant. I've spent the last 6 years doing it and have dealt with a lot of poo poo. I'd like to share that experience with people in the same boat, if there's enough around here to warrant it. USD accounts? Taxes? VAT? VATMOSS and brexit? Buying a house? WTF is a payment on account? Ask away. I am not an accountant and no suggestions from anyone in this thread should be taken as advice. Instead consider them a starting point for your own research and discussions with a licensed professional Jaded Burnout fucked around with this message at 14:05 on Dec 9, 2019 |
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Dec 8, 2019 03:19
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I'm pretty interested in this. For context I'm a nurse, but also part time in a sport instruction and training to be a mechanic. Ideally I'll be doing a mix of all three. Am I going to get rogered by tax for second and third jobs? The recent IR35 clamp down on nurses has been pretty damaging.
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Dec 9, 2019 11:53
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Shelvocke posted:I'm pretty interested in this. For context I'm a nurse, but also part time in a sport instruction and training to be a mechanic. Ideally I'll be doing a mix of all three. Ideally you want to make sure you're outside IR35 for all your engagements, at which point you're operating self-employed through your company. If you're working inside IR35 there's no useful distinction from just being an employee, at which point the regular guidance for PAYE folks applies. Do you know what the IR35 outlook is for all 3 of your engagements? I've been through the public sector IR35 changes which are coming to the private sector next year, and the IR35 "clamp downs" I've seen have either resulted in people owning up to the fact that they're really employees, or the client realising that they need to either honour the notion that their contractors are independent or fire them. Which of the two (or three) happens largely depends on how much leverage the contractor has in the marketplace. In tech it wound up with an extreme minority canning all their contractors, a few other departments reduced headcount, and most stayed exactly as they were. There was also some attrition of "contractors" who were really just disguised employees dropping out of the market because they were scared, which is a good thing, really. There was a lot of fear and upset among contractors when it happened but personally I saw it as a good thing, because what it really did was push the responsibility for due diligence onto the client to do it once rather than the hundreds or thousands of contractors to do it individually, and provided some incentive to keep people honest. How did it go for nursing? Jaded Burnout fucked around with this message at 13:24 on Dec 9, 2019 |
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Dec 9, 2019 13:21
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Agency Nursing was plugging some significant gaps in the workforce, with people trading job stability and working in the vicinity of their homes for better rates. It was great if you didn't mind working away from home and wanted stability, which I did. It drew some skepticism from some people but generally colleagues are (and often tearfully) grateful to have extra support The unfortunate result of the changes is that you either had to use PAYE and deduct expenses from your earnings, or use an umbrella company, which are, frankly, parasites. This has resulted in colossal staff shortages in an already ailing field. This one of the reasons why I want to reduce dependency on one profession. Anyway - is your suggestion that I operate under a limited company for all three fields?
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Dec 9, 2019 16:05
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Shelvocke posted:The unfortunate result of the changes is that you either had to use PAYE and deduct expenses from your earnings, or use an umbrella company, which are, frankly, parasites. This has resulted in colossal staff shortages in an already ailing field. That fuckin' sucks. Shelvocke posted:Anyway - is your suggestion that I operate under a limited company for all three fields? Well, if you want to be a contractor, yes, that's sort of the definition. If you're PAYE or umbrella then you're a regular employee, and so the tax details relevant to this thread (as opposed to the other UK finances thread in BFC) don't really apply. Not trying to boot you out, so much as provide useful info  While I've not had concurrent not-self-employed jobs myself, my assumption is that the income would be aggregated as normal, so three jobs at £20k, £10k, and £5k would be taxed equivalently to a single £35k job. I suspect you'd have to file a self assessment instead of using PAYE since you're combining incomes from multiple sources, but maybe they have a way to account for that. If it makes sense to run all three gigs through a limited company then they'd all be just regular revenue and would be taxed as such, corporation tax, VAT etc, and then you'd be into the normal channel of taking dividends and a single salary, and filing a self assessment based on that. Doing so would be more tax efficient, which is why IR35 exists in the first place.
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Dec 9, 2019 16:15
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Thanks for the advice. I think running as a limited is the best way forward, and phasing out hospital work (it really doesn't compensate any more)
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Dec 10, 2019 15:16
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GSK just said they aren't extending contracts of any IR35 worker, could be this is the inaugural move in another clampdown by the "new" govt.
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Dec 13, 2019 17:09
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Perhaps, though in my experience "rapid response" is not a phrase I associate with government departments or their corporate lackies.
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Dec 13, 2019 23:07
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HMRC have been aggressively targeting contractors for the past couple of years. Between the loan charge (which hit juuust at the 20 year mark after IR35 was introduced for maximum 'reclaimed' tax value) and the offpayroll changes, if anybody is considering contracting I'd urge caution. FWIW I've been contracting for the last eight years now, and I'm shutting down my company in the new year. Despite having multiple contracts at once, gigs overseas etc, it's just not worth the risk of a hostile government environment anymore. Especially given the kind of blanket Ltd company bans we're seeing from the likes of GSK, HSBC and others in the run-up to April. The net effect of this is going to be driving most flexible working via the big outsourcers like Capgemini or WIPRO, taking their big middlemen chunks of cash and screwing people who actually want to work independently. Still a bit gutted by the Labour loss, their manifesto would have actually equalised taking dividends and salary as a limited company contractor. But from a purely selfish point of view I think this means ER will be in place for the next year or so, so perfect time to shut it all down and take capital gains. And yes, the Tories will be removing it soon in order to Random other thoughts from a partially drunken mind: - Contactor mortgages are easy these days. Just show a contract with 3+ months left to run on it and multiple the dayrate by 1,0000 - Get an accountant. Don't gently caress about with this, just get one. - You accountant will probably tell you to go on the flat-rate VAT scheme. This is generally worthwhile for white class contracts. - Consider joining IPSE. This gives you a political voice, as well as a suite of things like IR35 coverage or jury duty pay - Recruiters are bastards. Don't trust them not to lie to your face. That said I've gotten my last five gigs from LinkedIn, generally via people I've worked with in the past - Maintain a separate business savings account for your corporation tax witholdings. Makes things much easier. -
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Dec 14, 2019 00:08
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