Contract or PAYE

Discussion in 'SMB' started by WildTurkey, Jan 12, 2018.

  1. WildTurkey

    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?
     
  2. What A Waster

    What A Waster Winger

    Plenty HMRC experts on here iirc
     
  3. No7

    No7 Midfield

    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%
     
  4. heroesof73

    heroesof73 Striker

    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
     
  5. box2box

    box2box Striker


    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
     
  6. 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.
     
  7. gazza.1990

    gazza.1990 Midfield

    Give the option, go PAYE, it's worth it for the workplace pension, holiday and sick pay benefits.
     
    Butcher's Coat likes this.
  8. WildTurkey

    WildTurkey Midfield

    Long contract
    700 a month expenses but reimbursed
    Setup fee for accountant, then once a year
    No other income
    Holidays, sick, 1% pension
     
  9. PAYE every time.
     
    gillythedilf likes this.
  10. The Butcher

    The Butcher Winger

    Haha why?
     
  11. As mentioned in previous posts.

    As a quick recap.
    No paying out for PPE. Tax and stamp taken off at source - no fucking 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.
     
    Latka Gravas likes this.
  12. WildTurkey

    WildTurkey Midfield

    Won’t be going through agency, will be a ltd co in my name
     
  13. Looks like you've already made your mind up there then.
    Best of luck in the new job marra.
     
  14. Quench

    Quench Winger

    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.
     
  15. The Butcher

    The Butcher Winger

    Fair enough mate, I duppose it depends on what you do. Sime industries/ disciplines prefer ltd company etc.
     
  16. Bob Fleming

    Bob Fleming Striker

    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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