Dangle_kt
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| posted on 29/8/13 at 01:01 PM |
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Any advise on tax setup as a consultant?
Hi guys,
Lots of professional types on here so I wonder if any of you can help advise on a good way to go with a prospect I'm currently toying with?
I work full time but an old boss has contacted me offering me management consultancy positions.
I've chatted to my boss and in principle got it agreed I can drop a day to explore consultancy for myself.
I know there are lots of ways you can set up to make it tax efficient... But I'd love someone tips from people who may have done something
similar in the past.
I think I could just do self assessment, and at the end of the year.
I also read about umbrella and Ltd company paying dividends.
I also read a bit on ir35 which seems to matter...
Anyway, any pointers would be greatfully received.
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MikeR
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| posted on 29/8/13 at 02:16 PM |
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No time now - but if no one answers, pm me and i'll post.
(set up as a project management consultant about 18 months ago).
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yozza
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| posted on 29/8/13 at 02:35 PM |
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HI
I just went as Ltd company in my new job working offshore but paying UK tax. You need to go online and set up as a Ltd company, cost about £12.00 Then
contact HMRC to register for flate rate VAT if applicable and corporation tax. You might be best employng an accountant who specialises in this area,
loads local to ourselves. Basically you pay yourself a small wage and a dividend every now and then. The salary is under the higher threshold so you
pay the lowere rate tax and the dividends are paid at corporation tax rates so around 21%. The VAT is a hassle but you might just make a little on it
as you charge 20% and pay back 14.5% on everything (even non-VAT items). It seems a bit daunting at first, especially IR35 but talk to a good
accountant and it becomes much clearer than the wishy washy stuff HMRC send out.
Hope that helps. PM me if you need any more.
Joe
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thefreak
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| posted on 29/8/13 at 02:45 PM |
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Or if it's small occasional work just do it through self assessment.
3 numbers on the form. Money taken in, expenses then difference between the two is net profit which is either taxed at 20% or if you're earning
loads, 40%.
Saves umbrella companies, IR35, VAT registered etc.
A good accountant will also save you more than he charges. He'll let you know what you can and can't put down as allowable expenses, sort
out charge backs for office space, mobile, mileage etc.
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JoelP
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| posted on 29/8/13 at 09:05 PM |
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How to organise it depends on how much you are earning from each source. I will assume you're well into higher rate tax between the two, in
which case going Ltd is definitely a good idea. I have a couple of tax guides from taxcafe about exactly this subject, 200 pages of pure gold. U2u
your email if you want them. Apart from that, get an accountant. It's always a good idea!
Beware! Bourettes is binfectious.
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Dangle_kt
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| posted on 29/8/13 at 09:34 PM |
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Thanks guys 
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