Nursing agency, paye or ltd?

milliemonster

I'm a registered nurse working part time and have recently joined a nursing agency for extra work occasionally, I have the option of going paye or they have said I can go ltd, but if I go ltd they want me to do this under their accountant who charges a one off fee of £100 and £80 a month after that.

The difference in pay is £4 per hour, so if I go with the ltd option they will pay me £4 per hr more, I'm envisaging working on average 3 x 12hrs shifts a month, can anyone tell me which way is going to be better for me?, also are the accountant charges fair for this? Or if the ltd option is the way to go, am I better off setting this up myself?

Any advice would be much appreciated

milliemonster

No it's not, I have a part time contracted job with the NHS already, this is additional work to that

CKhalvashi

00ec25 wrote: »

is this your only source of income? Think carefully if you go Ltd as you won't be building up NI credits

This isn't completely true.

I pay myself £9440 this year, and as such, I'll have the NI Credits.

It's more tax efficient to do it this way.

CK

milliemonster

Thanks, can you tell me if the accountant costs for this the agency are quoting are good value?

anamenottaken

milliemonster wrote: »

Thanks, can you tell me if the accountant costs for this the agency are quoting are good value?

Find out what is actually included in the £100 and £80/month.

Does the initial £100 cover setting up the private limited company?
Does the £80/month cover their filing annual returns at Companies House (including the filing fees)?
Will they expect to be appointed Company Secretary?
Do they charge VAT in addition?
Is it a named Accountant or a bookkeeper in the agency?
Will you have access to the person?
What is the minimum length of the contract with them?
Do they charge £80 in a month if there are no earnings?
In summary, what is the service they are providing?

Though the agency would want you to use their named accountant, do they insist on this and, if not, do they then charge an administration fee for their own involvement?

comeandgo

Are you sure they want you to be a Ltd company or did they suggest self employed? That charge is outragous if you are only making £1,152 a month. I suggest you take a course in bookkeeping or hire a book keeper for a few hours every 3 months. To set up a Ltd company is very easy. So to go Ltd the company pay you £144 a month extra but I think your extra costs will eat away at this and you are left in about the same position financially - do you want the hassle of being Ltd?

chrismac1

I see no reason why the agency should have a say - other than "ask this guy for a quote" - about which accountant you use. In fact I can see potential advantages in NOT using this guy - for example, is he their "tame" accountant so not likely to fight your corner in any disputes with the agency, for example?

The fees quoted are in the right ball park but it all depends on what sort of service you are getting. You'd want advice on IR35 protection as an absolute minimum, since prima facie - as they've said you could be PAYE - this is a contract of service i.e. one which is employment in nature, not self-employed.

As a minimum you should get one or two other quotes and choose the accountant who you get along best with, who answers your questions best.

chrismac1

Comparison services as an indication - the one person company sector lends itself to a standard fee system:Notifying the Registrar of the year-end.

• Setting up a PAYE scheme with HMRC.
• Submitting all PAYE Real Time Information files to HMRC.
• Registering for VAT.
• Preparing and submitting quarterly VAT return within 20 days of quarter end.
• Preparing quarterly profit and loss account showing dividends payable.
• Company board minutes and dividend tax vouchers and minutes.
• Maintaining the company registers.
• Preparing and submitting the annual corporation tax return.
• Preparing and submitting one personal tax return.
• Submitting annual accounts to Companies House and HMRC within 6 months of year-end.

Overall price of this is £850 plus VAT for the year.

Note that as you will be presumably providing medical services you will not be standard rated for VAT. Hence the "standard solution" of registering for the flat rate VAT scheme does not apply to you, hence in the above fee example it would come down to £700 or £750.

At least you now know what this accountant should be inclduing in his or her fee.

nomunnofun

Personally I would remain on PAYE.

The difference in your gross pay will be £144 per month.
You will, however, have the additional costs as described.
You understand PAYE.
You will have a lot less hassle and no need for an accountant.
Is the saving, if there is any, really worth it?

chrismac1

One last thing - based on your post you are NOT required to register for self-assessment, so that would reduce the fee still further. Many accountants automatically register all company directors for self-assessment, I'd be wary of those who do this.

Prothet_of_Doom

I am a freelance Manufacturing Engineer, and went ltd after my first contract offer following redundancy.

A number of things concern me.


You should go on the HMRC website and google "Disguised employee", "IR35", and look at the PCG website for guides on contracting. There is a HMRC survey with questions IIRC which tell you how much at risk you are.

If the agency are telling you that you must use their accountant then I have concerns. Your suggesting only working 432 hours a week, but don't give the hourly rate. Assuming £25 an hour that barely takes you into the taxable zone anyway, so I'd suggest that unless you are turning over at least £15K it's not going to be worth it


Having said all that, if you really are freelance, are free to offer your services to other agencies (and you really should make sure you have more than one client) , have professional indemnity insurance, then the costs of setting up and running a one man ltd company are not high or difficult.
There's a bit of time and lots of research to be done, and you'll feel out of depth occassionally.
Setting up a Ltd Company is about £40
Register as an employer (You employ yourself as a director, and you can employ other nurses and staff if you wanted)
Apply to become VAT registered. I assume that all your customers are VAT registered, and therefore it's worth a few pence on every £ of business cost to you...Look at the Flat rate scheme...It's all on the HNRC website.
Open a business bank account
Keep simple accounts.
Monthly I do my own PAYE submission, and quarterly I do my own VAT submission.
Talk to lots of accountants and get them to quote for doing yearly accounts.
My first guy was a muppet, and he came with a glowing reference from someone I trusted, but my second guy is very good.
Charges me £450 to check my accounts, and the expences claimed, compares it all to my bank statements and puts it into Companies house and HMRC.
You also have to register for self assessment.

Typically Ltd company owners would pay themselves a small wage of say £10K, plus legitimate business expences, and then a Dividend.
I also make sure that I put a decent ammount into a pension as the companies contribution.

It all looks quite dawnting, but there is probably a few ltd companies on your street http://www.companieslist.co.uk/06948235-mfj-logical-improvement-projects-ltd

I used this link and found that the bloke next door but one has JUST set up as a Ltd company as a Brick layer.