The Freelance Thread (Contractor, IR35)

Yes good point

yeah flat rate for 'service' (design) makes sense, you get I think 4% back depending on what business you register as.

Plus we have no regular expenses once the laptop etc is sorted.

Only if you're not a limited cost trader (which most contractors fall into) then it's 16.5%

So is it worth joining for the 1st year to get the relief on the initial £2k outlay and then leaving in year 2?

This is where you'd be better off speaking to an accountant than asking here.

I know it's annoying / frustrating as it feels like you should be able to answer this yourself and you probably can if you spend enough time researching it.

In my experience you then end up spending your 'free' time trying to work out your company and personal taxes.

I'd recommend trying to find a good accountant who is familiar with your industry

As full disclosure I've not found a 'good' accountant in 15+ years but have settled for one that I trust and can generally steer me the right way (I am happy to pay tax btw!).

Good luck

I couldn't really answer that for you, it's definitely hassle free being on the fixed rate but on a turnover of 100k for example i think you'll get about 200 quid back (except on capital over 2k obviously). I was on the fixed rate for 3 years then switched over to standard, it was painless for me because my accountants do my payroll and VAT as part of their service. If all of your clients are VAT registered (i.e not the general public) and filing the returns isn't a problem then I don't see a down side to being VAT registered even if you're below the threshold but I'm not an authority and happily pay an accountant to sort all that shit out for me.

I wonder if anyone has any advice re jury service.

I have a crappy job working with one of the major banks, employed through an agency, and paid through an umbrella company.

I've been called up for Jury service at the end of August (in Scotland, if relevant) - my work will have to let me go I think, as we don't have anything time sensitive to work on at the moment.

What are my rights - it seems like I can claim expenses, but from a quick read, those are capped, seemingly at around 60 quid a day, though that might be out of date. Can I even claim expenses as a contractor? All very confusing, and I definitely cannot afford to lose my meagre income. Has anyone who has worked through an umbrella company/agency had a jury citation?

At least I'll get to claim 10p per mile I cycle to the court....

Ask your umbrella co. if you'll be paid. They can decide. Apparently.

Probably they will not pay you though. Ask your umbrella co if they can tell the court that you can't do it because reasons.

Although you are a contractor you are an employee of the Umbrella co, so I would have thought you can claim expenses when umbrella co. decides to not pay you during the period of a contract.

If you were a director of your own co, things might be different.

JS is mostly short.

Apparently one of my colleagues had the same situation come up and was excused as the limit of around £60 per day of lost income compensation is too low - I certainly can't afford to take the hit at the moment.

So, never mind in the end - I'd love to do my part, but not if I can't afford to pay my rent as a result

i had to do it as well; only got min that they pay per day and lunch expenses; lost about £3k income ..

I'm really disappointed - the desire for a jury to be a broad cross-section of society seems at odds with the reality of the 'lost income' compensation.

Oh well, maybe when I'll get recalled I'll be in a better financial situation and can afford the hit

Jury Service loss of earnings is ludicrous.
£64.95 if you in for more than 4 hours.
£65 X 5 is £325 per week
That is actually less than minimum wage.

I think they assume that employers will still pay a wage or part of a wage

for this reason since i went PAYE i am praying for jury service

Ha! Maybe.

Even amongst NHS trust they do 3 different things.
1 paid full pay, 1 deducted the daily Loss of Earnings and 1 paid nothing.

Where I am now (private) pays nothing.

Trying to avoid IR35 in my next contract, looking for a "quickdraw" consultant/agency to quickly review my contract and suggest the necessary changes before I sign... Purchased IR35 insurance from Kingsbridge which turned out to be a glorified questionnaire to determine status, but my contract has weird wording, mostly to protect themselves against regular/payroll employees demanding high contractor fees as salary.

I have been approached for a fixed term contract that is outside IR35 (international client).

I am on a PAYE job now; couple of things I am not 100% clear about;

Pension; my current employer matches my 3% contribution and pays about £500 on top. Can I have same sort of arrangement with my limited company? I never looked into pension contributions as a limited company.

Mortgage; how do I balance my dividend to PAYE income so come 2023 when we are up for remortgage I am not fucked because I dont have a high salary? Initially when I thought this work was inside IR35 I was just going to go with an umbrella.

@JonoMarshall @TW and other adults answer pls

Pension; my current employer matches my 3% contribution and pays about £500 on top. Can I have same sort of arrangement with my limited company? I never looked into pension contributions as a limited company.

You Tax Dodg... I mean Company can have a policy that says it pays £Xs in to your pension. It doesn't have to be related to your contribution. You don't have to contribute at all from your 'salary'. You have to decide what is a defensible amount for your company to pay, as massive pension contributions can start to smell like tax evasion.

Mortgage; how do I balance my dividend to PAYE income so come 2023 when we are up for remortgage I am not fucked because I dont have a high salary? Initially when I thought this work was inside IR35 I was just going to go with an umbrella.

If you remortgage with an existing provider they might not look at your income, unless you tell them to. If they do, then just smooth your pay to be broadly similar to your PAYE income. If you look at other providers just pay a broker to sort it all out.

excellent ! thank you, one question, pension doesent count towards P11D benefit does it?

Re:pension: if you have the money in your company to do it then paying yourself (a director) a pension is a no brainer. You can pay up to £40k or your income from company, whichever is lower. You can us unused allowances from previous years to allow bigger contributions.

https://www.unbiased.co.uk/life/small-business/contributing-to-your-pension-via-a-limited-company-explained

Don't bother with matching / individual contributions - you wold end up having to gorss stuff up.

Have your limited pay direct into your group pension. - that reduces 1) your employER NI, 2) your corp tax, 3) your personal PAYE (short term - you have to pay tax on it when you cash it out).

Tell your pension provider what you are doing. My experience is that they are helpful. I use Hargreaves Landsdowne.

Mortgage providers don't care about blend of income (YMMV, obvs) . They want to know your overall source of funds.

I can refer you to my broker, who deals with contractor income.

thank you!

I will need a broker @TW but in 2023, will PM :)

pension isn't P11d-able, it is not a taxable benefit.

(you will pay tax on your pension when you draw it, rather than when you contribute to it, fuckers gotta get their cut)

you will pay tax on your pension when you draw it

And...you can't predict what the future tax regime will be.