Freelancer payroll option

brownbabygirl

hello, I will be working freelance (limited company) through an agency and I am wondering the best way to sort out my payroll, ie DIY or via a payroll agency. When I checked it seems these agencies charge over 125 pounds plus VAT per month to do the payroll and sort out taxes, annual returns etc. But is it worth doing this myself to save money? What exactly is involved in terms of paper work every week/month?

Comms69

Well you would need to pay yourself a wage, deduct tax and NI, make employer contributions; and pension. (and student loan where appropriate)


These are just the typical things, there could be others.

brownbabygirl

Comms69 wrote: »

Well you would need to pay yourself a wage, deduct tax and NI, make employer contributions; and pension. (and student loan where appropriate)


These are just the typical things, there could be others.

Practically how would I do that? Do I need a software like quickbooks for that? Would the agency pay gross pay into my account then I transfer to HMRC every month?

Comms69

brownbabygirl wrote: »

Practically how would I do that? Do I need a software like quickbooks for that? Would the agency pay gross pay into my account then I transfer to HMRC every month?

Sorry now im very confused.


You said you had a limited company? That means the money isn't yours personally.

spadoosh

Just your wage?

Diy it.

Have a play through these to see which you like working with best.

https://www.gov.uk/payroll-software/free-software

Should be pretty straight forward if its just your wage.

You can do online courses for payroll which will cost less than one months charge from the agency.


@ Comms you really dont need someone to be 100% accurate in their wording to decipher what theyre meaning do you? Plus theres no legal requirement for a limited company to have a business bank account and they can do it through a personal bank account. So your assumption about the money is somewhat speculative. No where did they say it was their money, they simply said 'my account'. Which is probbly right, the account will be in their name.

Comms69

spadoosh wrote: »

Just your wage?

Diy it.

Have a play through these to see which you like working with best.

https://www.gov.uk/payroll-software/free-software

Should be pretty straight forward if its just your wage.

You can do online courses for payroll which will cost less than one months charge from the agency.


@ Comms you really dont need someone to be 100% accurate in their wording to decipher what theyre meaning do you? Plus theres no legal requirement for a limited company to have a business bank account and they can do it through a personal bank account. So your assumption about the money is somewhat speculative. No where did they say it was their money, they simply said 'my account'. Which is probbly right, the account will be in their name.

Well sort of. No they don't need a business account, but the money belongs to the limited company.


So the suggestion then that they would just transfer an amount to HMRC was obviously naïve.


If this is a limited company, then you would start sorting out expenses, setting a wage, setting up a private pension!


It's confusing because 'freelance' typically sole trader / self employed.


Ltd Company - employee / director




There's obviously different implications for each of those.

spadoosh

Really someone asking questions about something is naive?

Its amazing we learn anything at all.

robatwork

When you say payroll agency do you mean umbrella company?

That charge seems fantastically high.

brownbabygirl

robatwork wrote: »

When you say payroll agency do you mean umbrella company?

That charge seems fantastically high.

I will not be using an umbrella company, just working freelance via my own limited company. I have worked with freelancers and I know we def paid into their private bank accounts. I am just trying to work out how they calculated and paid tax etc.

pelirocco

Comms69 wrote: »

Well sort of. No they don't need a business account, but the money belongs to the limited company.


So the suggestion then that they would just transfer an amount to HMRC was obviously naïve.


If this is a limited company, then you would start sorting out expenses, setting a wage, setting up a private pension!


It's confusing because 'freelance' typically sole trader / self employed.


Ltd Company - employee / director




There's obviously different implications for each of those.

In theory the money belongs to the limited company , but they are entitled to pay themselves every last penny thats there ( as long as its profits )

brownbabygirl

spadoosh wrote: »

Just your wage?

Diy it.

Have a play through these to see which you like working with best.

https://www.gov.uk/payroll-software/free-software

Should be pretty straight forward if its just your wage.

You can do online courses for payroll which will cost less than one months charge from the agency.


@ Comms you really dont need someone to be 100% accurate in their wording to decipher what theyre meaning do you? Plus theres no legal requirement for a limited company to have a business bank account and they can do it through a personal bank account. So your assumption about the money is somewhat speculative. No where did they say it was their money, they simply said 'my account'. Which is probbly right, the account will be in their name.

That link was so useful thanks so much!! I can now see the software can calculate how much I need to pay HMRC and organise it for me. Thanks so much.:T