Advice on employment status?

Trout69

Hi all,

Apologies if this is in the wrong topic, but i had a look and couldn't find anywhere more suitable.

I'm currently contracting for an agency, who supplied me to a large multinational as an IT engineer. At present i am using a company called Churchill-Knight to process my timesheets/invoices on a weekly basis, who have set me up as a Ltd company. However, they keep upping their charges and i am currently paying nearly £40 a week for there substandard services, whereby i am paid into a company bank account which they set up for me, then have to wait an additional 3 days for the money to be transfered into my personal account.

In a nutshell, all they do is process my timesheet, invoice the agency for my hours then deduct their fee, corporation tax, work out a wage for me which i think is based on minimum wage, paying tax and NI on this wage, then pay me the rest in what i think is a dividend. I am responsible for my own self assessment as a Ltd company, and i feel that i am paying through the roof for a service i don't really need, as surely i could cut them out and save myself the £40 a week fee?

My problem is, when looking to find my employment status, i do not seem to fall under the bracket of self employed. The contract i am working on at the mo provides me with a van, phone and Blackberry. Even though i can opt whether or not too work, this still doesn't seem like the correct option when looking on the HMRC and Businesslink website, and it seems a lot more complicated to continue running myself as a Ltd company without any help.

I would much rather invoice directly myself, pay my own personal tax and NI out of this, and be left with a more substantial % of what i earned.

My query is, can anyone advise the best way to do this? Can i be classed as self employed? Or is there an easier way to continue as a Ltd company. I fi leave this management company, i will have to start from scratch as they will not release the current ltd company name to myself, nor the bank account.

I just begrudge paying for this service when i don't feel i need it, nor can i guarantee being paid on time, or get a straight answer out of them when i'm not paid.

Your advice would be very much appreciated, as i can hopefully find a more efficient way to do this and save myself in excess of £300 a month in fee's and corporation tax.

Best Regards

Donna

tara66_2

Hi trout 69
I can't help but someone else on here may well be able to, lots of clever peeps. I would also post this query on the small biz and charities bit on the main board which I think comes under 'who and where you are' if you scroll right down past DFW on the main forums menu.
Tara x

Mum_of_3_3

Just a couple of quick things as I need to go & get my eldest from a sleepover.

Woud the multi-national let you deal with them directly? Some big companies prefer to use one big company (ie Churchill-Knight) and let them filter the money down through, the reason for this is that it keeps their record keeping easier.

You must have an accountant who deals with your accounts, Annual Returns etc? Why don't you go to them and ask their opinion about whether you would be better s/e or Ltd. You may be a Ltd Co for tax reasons.

If your accounts get done through Churchill-Knight's accountants (or by them) then try & find a friendly, local accountant who will take a look at your accounts and tell you. If it's more benificial for you to become s/e then they can do your accounts and Tax Returns for you.

I suggest not going to a big firm of accountants as in my experience & opinion they normally charge a much higher fee for just the same (if not worse) level of service. Ask around some s/e friends of yours & see who they use and whether they are happy with them.

What about the other subbies you work with are they s/e or Ltd? Ask around & see what they do and who they use if they are s/e.

Good luck with it all

M_o_3

tyllwyd

Why not try asking on the cutting tax board?

I think you need to talk to an accountant and get some proper professional advice. If you are only contracting for one company, it can be difficult to convince HMRC that you are genuinely self-employed. If you are a limited company, on the face of it I don't see why you couldn't invoice directly, but you need to be careful about the tax rules. A good accountant should be able to tell you the most tax-efficient way of going about things - personally, in your situation I wouldn't try to do it myself without an accountant.

hbslc

My employment status is much the same. The main issue is whether or not your contract is in or out of IR35. Unfortunately, nobody will really be able to tell you, other than HMRC, and lets face it we'd all rather avoid them 'taking a look'.

I have my own limited company, my own accountant and I do bookkeeping & invoicing myself. I opted for a larger firm than I wanted coz of some circumstantial complexities, once they're resolved I'll be moving to a smaller firm. I believe my contracts are outside of IR35, as I have contracts with more than 1 client rather than 1 contract with 1 client. I still use client assets to complete my work.

You only have to have an accountant if your limited company annual sales exceed a certain amount - i think this is current £1m. But I find having an accountant is useful to police me, fill any holes, and adds some professionalism to my company.

You have to be VAT registered if your annual sales exceed about £60k, not sure of the exact amount. You can volunteer to be VAT registered to - I did as my clients are big companies and again it adds some professional. Doing VAT returns is a real headache. However, HMRC have different schemes to help small business. For example, if annual sales are less than £120k (again not sure of actual amount), there is a flat % fee. So you don't need to work out sales & purchases etc... I haven't done this as my annual sales are approx £110k, too close to the threshold, and I want to increase rather than maintain my sales.

Hope this helps.