Self Employment - advice needed

[murfitUK]

I am self employed and used a company in the Isle of Man to deal with my invoices and payments. I used to pay myself the minimum wage and received a shared dividend for the "profit" I made.

It was good while it lasted but Gordon has now put a stop to it. I'm interested in dealing with billing and payments myself but don't really know where to start.

Do I have to set up a company or can I just call myself self-employed? What about tax, NI contributions, expenses - what can I count for expenses etc.

I've tried to find out if there are any advisory agencies that can help with some of my questions but not having much luck.

Does anyone know of good place to start?

[Graham M]

Have you tried the Citizen's Advice Bureau?

[slug]

Are you registerd as self employed?
This is the place to start, http://www.hmrc.gov.uk/selfemployed/ it also has info about NI payments and the such.

[Hugh]

some good (imho) info here PCG (http://www.pcg.org.uk/cms/index.php)

[Scarlett]

My accountants (http://www.jsagroup.co.uk/our-services/limited-company-services/JSA-Accountancy-Service/) have just taken me through the process.

There is loads that you need to do in addition to registering a company (you'll need a business bank account etc.) I'd suggest calling them and having a chat as they are all compleatly legit and above board and quite smug about that fact. They will as a first step vet your contract to ensure that you don't get caught by IR35 but once thats done then you can plough on with sorting out a company etc.

They do advise that you avoid anyone offering some 'managed solution' as these have what's been outlawed.

Also if your contracting I'd seriously suggest following foreverwar's advice and at least having a look at the PCG website even if you deciude not to join.

[murfitUK]

Thanks for those ideas.

I'm not sure if I should be self-employed or set up a limited company. The HMRC runs free workshops so I've booked one online so hopefully that will be a place to get some answers.

[Scarlett]

Thanks for those ideas.

I'm not sure if I should be self-employed or set up a limited company. The HMRC runs free workshops so I've booked one online so hopefully that will be a place to get some answers.

What exactly do you do? if it's something like construction then you probably need to be self employed. Are you a contractor? then if so then the limited company route is probably for you.

I am aware that if you need to go the limited Co. route then this will take you some time (a couple of months possibly) to get setup in which time you will not be able to invoice

This will not be helped by the fact that a LOT of IT contractors (like myself) have had to make the move from managed services companies to Limited companies. the revenue and companies house have been swamped (e.g. I have been told a VAT number is probably 12 weeks away and I still don't have my filing details for companies house 2 months after setting up the company)

I'm always wary of the advice that the revenue might hand out as it's in their interest to make sure that you pay your fair share but with them defining what 'fair' is.

[murfitUK]

What exactly do you do?

I write policies and procedures and training courses for local councils dealing with housing law, homelessness, benefits etc. (And yes - it is as boring as it sounds!)

The management company I use are based in the Isle of Man but they can't pay the wage & share dividend any more, so its just going to be an ordinary pay per hour with tax and NI taken off.

They charge a management fee and I'm looking into whether its something I can do myself. If its going to be complicated and time-consuming then I suppose I won't begrudge paying the fee, but if its easy enough to do myself then I'd rather not pay anyone a fee for doing it!

[Hugh]

Try an umbrella company - they do all the processing for you, and it costs (me) around £60 per month, which is tax deductible, so only costs £36 per month.

[Xaccers]

I use an umbrella company too, very handy, even if Gordon Brown did cause them to mess up their March/April payments to me. They sorted it out straight away though.
Pre-budget, they advised setting up a ltd company, but unfortunately Gordon Brown had lied to them before the budget, so the result would be that if I saved income tax, my clients could be sued for the amount I saved, so no one would have touched me, and a lot of companies in the IT business may avoid one man ltd companies because of that.
So I've closed my ltd company down, and there are thousands who not only started one up to carry on as before, but are now closing them all down, prefering to go via the safer umbrella option.
Bet HMRC and CH are loving that.
Expect 2006/7 to be a record year for company creations and closures.