Which Solution is best suited?

blangoman

I would appreciate any :money:advice on my newly formed situation. Any help would be great as i start the new contract on monday;(.

Which is best suited to my situation from the information supplied below given my intentions:

Options that come to mind are:
a.) Register with HRMC for the CIS Scheme
b.) Open a Ltd Company
c.) Use offshore trust i.e. IOM

Details:
My new construction contract is for 6 Months with little or no expenses to be incurred. Paid @ £1800/wk.

However, after this 6mth contract period i intend to lease a car for an approx. cost of £650/mth (TVR/Porsche) plus Insurance etc. How much % of lease value/insurance/mileage can i reclaim and how?
I also intend to buy some expensive equipments needed for the contract i.e. £3000-4000 how much can i reclaim and from where is the incurred cost offset/taken from?
Other possible costs : Proffessional Indemity/Personal Liability/PCG Cover(IR35).
I view myself as self employed given the criteria from the HRMC website and deal in IR35 friendly contracts from any agencies used, i will also gain cover i.e PCG. Apologies if this does not make much sense, i am confused slightly.

Thank you much appreciated

Elaine_Wilson

Ok. I'll start with a few answers. First of all I know nothing about offshore trusts so bear in mind I'm only thinking of self-employed or limited company.

Most of what you ask about claiming is the same for both.

Insurance should be allowable as a deduction though I'm not certain about the PCG cover.

The equipment would fall nto the capital allowances regime. A first year allowance of 50% for 2007/08 would be followed by a writing down allowance of 20% a year on the reducing balance system.

The deduction for leasing would be restricted to the following fraction of the expenditure incurred.

((List price - £12,000) / 2 + £12,000) / list price.

i.e. you are allowed a pro rata deduction for a value half way between £12,000 and the list price.

So your big decision is whether to use a company or not. This ill depend on other circumstances but bear these points in mind.

Use of a company and an aggressive policy of paying low salary and large dividends is likely to result in a closer look regarding the IR35 provisions.

The car would no doubt incur a hefty benefit in kind charge from a company.

The additional costs of maintaining a company are probably not really relevant on your level of earnings.

If you as an individual would have to register under the CIS scheme then the company would also be in the same position as it is the provision of the services which are relevant.

Don't forget to consider VAT. If you continue earning at that level you will have to register before the year is out but you might want to do this early.

I'm sure there's loads more but I'm off to a wedding shortly.

blangoman

thank you for your reply any other suggestions or solutions to think about or incorporate?