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Discuss CIS > PAYE > Setting up LTD. in the Business Related area at ElectriciansForums.net

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J

JDizzle

Hi guys,

First post on the forum so go easy on me.

Ive been an electrician now for 12 years and started off as an apprentice and served my time under Lorne Stewart in Bristol. I left Lornes a year after coming out of my time and have been 'self employed' ever since (7 years).

It started off so well being under the CIS scheme but now being forced to go PAYE and use umbrella companies, is in my opinion, killing the enjoyment. How is everyone else finding it?

I am now considering setting up myself as a LTD company but Im a complete novice when it comes to the ins&outs and the pros and cons. Im just looking for a bit of advise really into what steps I should take to do this. Being stung for £100-200 NI every week is something I just cant comprehend and to be totally blunt im looking for the best way to make sure most of the £'s I earn stay in my pocket!

Cheers
 
Hi guys,

First post on the forum so go easy on me.

Ive been an electrician now for 12 years and started off as an apprentice and served my time under Lorne Stewart in Bristol. I left Lornes a year after coming out of my time and have been 'self employed' ever since (7 years).

It started off so well being under the CIS scheme but now being forced to go PAYE and use umbrella companies, is in my opinion, killing the enjoyment. How is everyone else finding it?

I am now considering setting up myself as a LTD company but Im a complete novice when it comes to the ins&outs and the pros and cons. Im just looking for a bit of advise really into what steps I should take to do this. Being stung for £100-200 NI every week is something I just cant comprehend and to be totally blunt im looking for the best way to make sure most of the £'s I earn stay in my pocket!

Cheers

Booking an appointment with an accountant would be a good start. There are ways of taking a low wage and being paid dividends etc. A good accountant can advise you on all this and form the company etc for you.
 
Upvote 0
Hi guys,

First post on the forum so go easy on me.

Ive been an electrician now for 12 years and started off as an apprentice and served my time under Lorne Stewart in Bristol. I left Lornes a year after coming out of my time and have been 'self employed' ever since (7 years).

It started off so well being under the CIS scheme but now being forced to go PAYE and use umbrella companies, is in my opinion, killing the enjoyment. How is everyone else finding it?

I am now considering setting up myself as a LTD company but Im a complete novice when it comes to the ins&outs and the pros and cons. Im just looking for a bit of advise really into what steps I should take to do this. Being stung for £100-200 NI every week is something I just cant comprehend and to be totally blunt im looking for the best way to make sure most of the £'s I earn stay in my pocket!

Cheers

Are you sure its just NI?
 
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Are you doing agency work? The new agency workers regulations are screwing many trades over, I ended up going limited, it cut out the payment agency fees as well as I could just invoice the agency as usual.Probably best if you speak to an accountant to check it is the right thing for you if you can't get your head around all the tax and legal implications. It is easy and cheap enough to set up your own ltd co. Don't know how much an accountant would charge, but if you know one sound them out (my brother is chartered so gave me some free pointers).
 
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Booking an appointment with an accountant would be a good start. There are ways of taking a low wage and being paid dividends etc. A good accountant can advise you on all this and form the company etc for you.

I have booked an appointment with my accountant next weekend. I know last time I spoke to him about it he advised me against it so hopefully I can get more sense out of him this time round!

Are you doing agency work? The new agency workers regulations are screwing many trades over, I ended up going limited, it cut out the payment agency fees as well as I could just invoice the agency as usual.Probably best if you speak to an accountant to check it is the right thing for you if you can't get your head around all the tax and legal implications. It is easy and cheap enough to set up your own ltd co. Don't know how much an accountant would charge, but if you know one sound them out (my brother is chartered so gave me some free pointers).

Yeah its all agency work unfortunately I should of stated that in my OP sorry.
My accounts fees go up 4 fold for him to cover the paper & legal side of things. I think all in all it will cost me £800 for my accountant to cover it, which sounds a lot but in the long run id be paying a lot more in NI.

Are you sure its just NI?
id say he's sure. The parasites that are umbrella companies make you pay both employer and employee NI. An absolute disgrace of a scam brought in to shaft those in construction even more!!

Irish hit the nail on the head. It is a disgrace. I mean going from £12 p/m class 2 to ~£600 p/m has nigh on crippled me financially. It also doesnt help that none of the agency rates have improved to cover the influx of NI.
 
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I have booked an appointment with my accountant next weekend. I know last time I spoke to him about it he advised me against it so hopefully I can get more sense out of him this time round!



Yeah its all agency work unfortunately I should of stated that in my OP sorry.
My accounts fees go up 4 fold for him to cover the paper & legal side of things. I think all in all it will cost me £800 for my accountant to cover it, which sounds a lot but in the long run id be paying a lot more in NI.




Irish hit the nail on the head. It is a disgrace. I mean going from £12 p/m class 2 to ~£600 p/m has nigh on crippled me financially. It also doesnt help that none of the agency rates have improved to cover the influx of NI.


Listentotaxman Guides: Contractors- LTD Company v Umbrella - The Free UK PAYE Salary Calculator Wage Calculator Income Tax Calculator 2014 / 2015

A brief summary with examples.
 
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By going Ltd, there are lots of ways to reduce your tax liability. Paying yourself minimum wage. Putting wife on the books as bookkeeper on minimum wage.
I get paid 10k a year, and pay my wife 10k a year. I then take a dividend from the company. You can also use vehicles that are classed as company vans such as crew cab pickups as opposed to cars.
You need a good accountant who understands all the rules.
It's worth it at the end of the year, when you see your tax bill.
 
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By going Ltd, there are lots of ways to reduce your tax liability. Paying yourself minimum wage. Putting wife on the books as bookkeeper on minimum wage.
I get paid 10k a year, and pay my wife 10k a year. I then take a dividend from the company. You can also use vehicles that are classed as company vans such as crew cab pickups as opposed to cars.
You need a good accountant who understands all the rules.
It's worth it at the end of the year, when you see your tax bill.

That will ONLY work if she doesn't have a job!
 
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That will ONLY work if she doesn't have a job!
She does have job, she is my bookkeeper. My son has just got his NI number, so he is also getting 10k a year from June.

Dividends are the best way to take money out of company though, no NI contributions and tax is only 20%.

Company pension contributions are also a good way to reduce Tax, if you can wait till you are 55, to get your hands on the cash.
 
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She does have job, she is my bookkeeper. My son has just got his NI number, so he is also getting 10k a year from June.

Dividends are the best way to take money out of company though, no NI contributions and tax is only 20%.

Company pension contributions are also a good way to reduce Tax, if you can wait till you are 55, to get your hands on the cash.

I meant another "proper" job paying tax!

You can't just "pay" your son £10K for doing nothing!

And what then - waste it - and pay the tax taking it out?
 
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I can pay him 10k for working during the summer holidays.

Who knows what tax laws will be in place when I am 55. I have paid no tax putting the money into a pension. I don't know what my financial situation will be in 10 Years. It's all about limiting your tax liability, and spreading your assets around
 
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I can pay him 10k for working during the summer holidays.

Who knows what tax laws will be in place when I am 55. I have paid no tax putting the money into a pension. I don't know what my financial situation will be in 10 Years. It's all about limiting your tax liability, and spreading your assets around

And then HMRC come and inspect you, and ask why you are paying your son well above the odds, and therefore reducing YOUR liability....... and then they start going back though your books for 5 years and you land with a big bill!
 
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If your NIC is £600 per month, you are making a f************* lot of money!

Ha god I wish! Im working nigh on 50 hours a week and taking home £550. The rates in Bristol are pathetic to say the least.

By going Ltd, there are lots of ways to reduce your tax liability. Paying yourself minimum wage. Putting wife on the books as bookkeeper on minimum wage.
I get paid 10k a year, and pay my wife 10k a year. I then take a dividend from the company. You can also use vehicles that are classed as company vans such as crew cab pickups as opposed to cars.
You need a good accountant who understands all the rules.
It's worth it at the end of the year, when you see your tax bill.

I want to follow the rules as much as possible as cant be arsed with the grief. If my wife is currently employed, can I still pay her to be my secretary? Id also like to avoid giving her money if possible!
My accountant is pretty decent, ive gotten a better picture of the whole LTD situation now thanks to the forum so i guess i can say mission accomplished and thank you!
 
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And then HMRC come and inspect you, and ask why you are paying your son well above the odds, and therefore reducing YOUR liability....... and then they start going back though your books for 5 years and you land with a big bill!
Everything I do, is within the tax laws. HMRC cannot tell me how much I pay people. I was audited 2 years ago, and was a clean bill of health.

I don't do homers, everything goes through the books. I have no problems with HMRC.

I do everything possible within the rules to reduce my tax bill.
 
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