Working as a contractor?

[Rasta Pickles]

Hello,

A brave new world awaits me. I am due to retire from a very busy PAYE life and my line manager says the company will have no problems paying £500 a day to me as an external contractor to assist in some major projects due to be delivered over the next 24 months.

That's not £500 a day, 5 days a week for the next 24 months Just £500 a day as and when my services are needed.

What's the best (as in, most tax-efficient) way of going about this?

I guess setting up a limited company and doing something that way?

Any advice gratefully received.....or any pointers as to guides that would help me.

 

[boxlot]

If it's only "as and when my services are needed" just register as self employed, no need for ltd. With ltd accounting expenses will be higher.

 

[Rasta Pickles]

Aren't there all kinds of "perks" with a limited company? As in, I work 30 days @ £500 a day which my company invoices them for......but I don't have to draw that as a salary, I can only pay myself a notional amount to avoid tax? Plus I can claim 45p a mile for travelling?

Or have I misunderstood? (Hence my original question )

 

[boxlot]

Best would be if you discuss it with the accountant. In any case the self employment will be more profitable. For example SE tax return will cost maybe £100, Ltd annual accounts will cost at least £800. With ltd you will have to pay 20% corporation tax on profit. Travelling can be covered on both cases etc. There are so many different things to consider but in overall the self employment is better option.

 

[WaveJumper]

I would perhaps sit down with a tax advisor / accountant in the first instance as there could be many variables depending on your current level on income ie the income from various pension pots, ability to maybe make use of spouses un-used tax allowance I would look at all of this and when you have a handle on this it should help point you in the best way forward.

A small business guide to self employment

Self-employment is tempting many away from being a full-time employee. We look at next steps if you want to go into business for yourself.

smallbusiness.co.uk

 

[Mark T Jones]

It's never a simple/obvious answer, but running a limited company comes with admin and costs which are intrusivefor occasional work.

On the other hand, your 'employer'might have their own rules.

As @WaveJumper says, if you want proper, dedicated advice you need to pay a professional

 

[fantheflames]

It's never a simple/obvious answer, but running a limited company comes with admin and costs which are intrusivefor occasional work.

On the other hand, your 'employer'might have their own rules.

As @WaveJumper says, if you want proper, dedicated advice you need to pay a professional

Totally agree @Mark T Jones . I'd say self employed, but ot's all based on OP's personal and financial circumstances. They might be better off taking a different route. Speaking to an accountant about those decisions is often the only answer, although UKBF is a great place to start. Thanks @Rasta Pickles, best of luck! Let us know how it turns out for you.