Contract or PAYE

WildTurkey

Midfield
Given the choice, would it be better to take a new job under usual FTE/PAYE or contract and set up a ltd company?

The contract will be a slightly higher rate as the company will not have to pay the overheads as with PAYE

Will contract allow me to officially pay myself less, therefore getting taxed less, and also give me perks as being able to lease cars, pay for phone through company, reclaim vat on expenses etc etc?
 


All depends on what’s involved. Will you be IR35 compliant etc?

Pay yourself the current tax free limit as salary, £11,500 or whatever it is tax free, then your dividend which is now taxed anyway. Flat rate VAT is pointless now as pretty much every catergory is repaying back 16.5%
 
Couple of years ago Ltd co would be the way to go but not as clear cut now with recent changes.
Of course you get a higher rate contracting--no holiday pay, BH pay, sick pay or Pension
 
Given the choice, would it be better to take a new job under usual FTE/PAYE or contract and set up a ltd company?

The contract will be a slightly higher rate as the company will not have to pay the overheads as with PAYE

Will contract allow me to officially pay myself less, therefore getting taxed less, and also give me perks as being able to lease cars, pay for phone through company, reclaim vat on expenses etc etc?


As a limited co contractor you will pay around 15% less tax compared to paye, travel to / from work is claimable ( effectively net 10p/mile). On the flip side no pail annual leave, company pension etc
 
Depends on a lot of things tbh. How long for what the differential is, what expenses you will have, do you need to pay someone to do accounts, other sources of income. What other benefits do you get on PAYE? Holidays? Sick pay? Pension?
Tax on dividends has changed as well iirc.
 
Depends on a lot of things tbh. How long for what the differential is, what expenses you will have, do you need to pay someone to do accounts, other sources of income. What other benefits do you get on PAYE? Holidays? Sick pay? Pension?
Tax on dividends has changed as well iirc.
Long contract
700 a month expenses but reimbursed
Setup fee for accountant, then once a year
No other income
Holidays, sick, 1% pension
 
As mentioned in previous posts.

As a quick recap.
No paying out for PPE. Tax and stamp taken off at source - no f***ing about with accountants. Full entitlement to holiday pay, notice of redundancy, and in general not paying for an agency (scum of the earth) through your own graft.
Won’t be going through agency, will be a ltd co in my name
 
It’s all about rate differential. For contracting to work you need a big uplift compared to a staff rate. I would want at least 50% more than you’d get in a staff role to consider it. I’ve contracted on and off (mainly on) for the last 12 years and it has certainly become less lucrative over the past 2 - 3 years.
 
As mentioned in previous posts.

As a quick recap.
No paying out for PPE. Tax and stamp taken off at source - no f***ing about with accountants. Full entitlement to holiday pay, notice of redundancy, and in general not paying for an agency (scum of the earth) through your own graft.
Fair enough mate, I duppose it depends on what you do. Sime industries/ disciplines prefer ltd company etc.
 
I'd be Ltd if I could but government contract so insisting inside ir35. Mind they increased the daily rate because of that.

So got an umbrella company arrangement. Nice and simple really.
 

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