Re: [Totally OT] How to become a contractor

[James Fidell <james@xxxxxxx>]

Missed this when it was originally posted, but I'll add my 2p anyway...

> No substitute for talking to a good accountant.  You will need to
> balance different factors, especially the IR35 rules and how to blag
> around them; your individual tax situation; how long you plan to be a
> contractor;  how much you expect to earn; do you want your own company
> pension scheme,  etc..

Rumours are circulating that IR35 is going to be scrapped this April.  If
so I'd guess that it's fairly likely to be because the IR have lost so
many cases in the courts or at the special commissioners that it's not
actually bringing in any revenue.

Further rumours are circulating that additional taxes will get slapped
on dividends paid by small closed companies as an alternative measure,
perhaps by requiring NICs to be paid on dividends (for small closed
companies only) and/or removing the tax credit associated with them.
Either way, there's also the IRs attempt to misapply S660 to think about
as well, though there's a court case in progress at the moment that
might well spike that.

> Also, many companies and/or agencies won't use
> you unless you have limited company status.

Basically, the IR will chase them for income tax and NICs if you're
self-employed and don't/can't pay them yourself, so for their own
peace of mind they want to interpose another legal entity between
themselves and you.  IME, some agencies also expect you to be VAT
registered.

> I started as self employed, then switched to a company around 10 years
> ago - I think its easier to keep track of the dosh with the company (I
> use Quickbooks and its great) and easier to be disciplined.  Talk to a
> good accountant, if you are anywhere near Somerset I can recommend one

Having just moved back to Somerset after fifteen years in the wilderness
of the south east I could be interested in that myself, but Somerset is
a large area.  Whereabouts are you?

James

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