Self employment and taxes....

[Blue Duck]

I have recently started agency work, I'm here at the bottom of the pile being reamed by the taxman and the umbrella company.

So I'm seeking advice as to which is the best route to take so I can take home more of my hard earned money.

Obviously I need to register for CIS  but as a sole trader or an Ltd?

Advices are much appreciated!

 

[Zeespark]

LTD, It would cost you the fees of an accountant, but you can claim everything, whereas you cant for umbrella, I stand to be corrected if I am wrong.

Andy Guinness

 

[Evans Electric]

I don't think you need to be LTD  Duck ,  no idea what umbrella means . 

Are you employed by the agency at the moment ?  

I was , still am , a Sole Trader .  Before my tax is calculated  I claim for various stuff including the following to be set against it .

You can do and submit your own tax return  (Self Assessment )   without using an accountant  if you want . 

Is the agency deducting tax from your pay ?     If so you need to get the details of those deductions or ...as I've heard recently ,  you can end up paying twice . 

Ducky ,   If you  register for CIS  ...PM me   

Purchases

Sub contract labour

Closing stock

Motor repairs & Travel

Van insure

MOT

Road Tax

Office  phone 

Cell phone

 Insure

Use of Home as Office

Stationery

Accountant fees

ELECSA

Overalls & laundry

Computer consumables

Bank charges

Tools & repairs

 

[Sharpend]

Duck, take your time with this a hasty decision now could have a longer effect. 

If you register as a sole trader and operate under cis then you’ll pay the standard 20% tax at source. You will also pay the umbrella company fee each week, however you can write the fee back into your acccounts as an expense. 

Also you may not need to do agency work for a long period as you will find that if you perform well and are a likeable person then the company you are put with may offer you a more regular position direct as either an employee or if you ask a subcontractor, which usually results in more money. 

 

[Blue Duck]

LTD, It would cost you the fees of an accountant, but you can claim everything, whereas you cant for umbrella, I stand to be corrected if I am wrong.

Andy Guinness

Thanks Andy, 

I have been told LTD is the way forward but wasn't sure if this may limit my employment further down the line?

Also, all I can claim for is mileage. 

I don't think you need to be LTD  Duck ,  no idea what umbrella means . 

Are you employed by the agency at the moment ?  

I was , still am , a Sole Trader .  Before my tax is calculated  I claim for various stuff including the following to be set against it .

You can do and submit your own tax return  (Self Assessment )   without using an accountant  if you want . 

Is the agency deducting tax from your pay ?     If so you need to get the details of those deductions or ...as I've heard recently ,  you can end up paying twice . 

Ducky ,   If you  register for CIS  ...PM me   

Purchases

Sub contract labour

Closing stock

Motor repairs & Travel

Van insure

MOT

Road Tax

Office  phone 

Cell phone

 Insure

Use of Home as Office

Stationery

Accountant fees

ELECSA

Overalls & laundry

Computer consumables

Bank charges

Tools & repairs

Thanks Deke,

Pm is on its way...if I don't fall asleep watching two dorky Austrailians putting an rb26 in a 240z  :yawn

Basically I'm paying NI twice and on top of that umbrella fees costing me including income tax & NI about £220 / week!

Umbrella basically deals with the tax and admin in return for a fee.

Duck, take your time with this a hasty decision now could have a longer effect. 

If you register as a sole trader and operate under cis then you’ll pay the standard 20% tax at source. You will also pay the umbrella company fee each week, however you can write the fee back into your acccounts as an expense. 

Also you may not need to do agency work for a long period as you will find that if you perform well and are a likeable person then the company you are put with may offer you a more regular position direct as either an employee or if you ask a subcontractor, which usually results in more money. 

Cheers Sharpe, 

Good to know I can write off this umbrella nonsense, bloody vultures that they are.

I feel I'm doing well surrounded by 5ww's and EE's, I probably stick out a bit!  :lol:  

But... the company I'm working for is a sub contactor for a large brand who are supplying the knowledge  and equipment and we are installing it. 

The company I'm working for aren't local either.

I've been PAYE for as long as I can remember and not keen on returning to that enviroment, ultimately I want to be my own boss but I'm currently seeking different oppourtunities and perhaps straying from bs7671, part pee and the scams.

Although if the right opportunity comes along I will take it!

 

[Sharpend]

Duck you in London? 

 

[Blue Duck]

Yeah,

Other side of the river...

 

[Sharpend]

What south? 

 

[Blue Duck]

North, thought you were south?

:Blushing

 

[Sharpend]

Well I am at the minute but it’s ever changing, I don’t actually live here anymore, 200m north!! I’ll send a pm. 

 

[Blue Duck]

Yorkshire then?

Too late!  I derailed my own thread! 

:slap

 

[Evans Electric]

Can you guys decide WHICH side of the damn river you are on   :C      I'm North of the  river .    By about  100 miles :C

Duck , are you looking more at data / IT installs  than lecky work ?   

My  feelings against agencies and now umbrellas  have been aired before on here  ,  they are somewhat below  terrorists  and the  Nazis . 

The quicker you kick them into touch the better ..... you need to be putting feelers out all the time  ...its all about  who you know .

There are not many advantages  in being Ltd  unless you were getting much bigger .   IMHO 

 

[Blue Duck]

Sorry Deke, I was a bit sleep deprived and allowing my mind to wander.  :Blushing

Honestly I feel disheartened by the powers that be picking the pockets of honest hard working folk.

Had my fill of domestic work too!  currently working on a large commercial site fitting fire alarm systems and am enjoying it.

Because it's a large site there are few people  I know there so hopefully we can look out for each other whilst learning Romainian, win win!  

 

[Evans Electric]

Fire Alarm installs do not require  deductions  under the CIS scheme  .    Same for computer data wiring .    See below .  

So I'm wondering why this "umbrella" outfit are deducting 20% tax  from you at all  .   Apologies for complicating things . 

If they are deducting tax at source and you are self employed  I believe you do need to register  under CIS  .     How do they pay your deductions to HMRC  if you havn't been given a UTR tax Number .  

 

[Evans Electric]

Thanks Deke,

Pm is on its way...if I don't fall asleep watching two dorky Austrailians putting an rb26 in a 240z  :yawn

Basically I'm paying NI twice and on top of that umbrella fees costing me including income tax & NI about £220 / week!

Umbrella basically deals with the tax and admin in return for a fee.

:facepalm:     When I read this it makes my blood boil  .   I was misunderstanding and getting carried away  , sorry ,   if they make all those deductions  your status must be  "Employed"  

 

[Andy™]

a lot of work is non-cis

 

[Blue Duck]

Here is my payslip, see if you can make sense of it.....

I'll be back later, got to put duckling to bed!

 

[Kurt]

Not familiar with that type of system but if you were purely SE and earned £700/w you would take home roughly £550 after TAX and NI

 

[Evans Electric]

Thats some payslip ,  you are obviously "Employed"  by somebody  or they  wouldn't be stopping NI  or paying holiday pay .

If you were self employed and working as a  sub-contractor to them  , your Gross pay to Date  would be  £ 819.19   and your net pay to date would be  £819.19 .  

They appear to be deducting tax @  between 9 - 10 %  in one box  and just under 20% in the other .

And you are on an emergency Tax Code  which normal  at the start of employment 

Don't know what the following are : 

Nier's -Al                            65.53 :C

Company margin          20.00 :C

 

[Sidney]

All umbrella companies do is screw you over, wait until you claim your holiday pay, it will have an admin fee attached.