As the title says:
Is it worth it?
Pros/cons?
Do you do it, if so why, if not why not?
Rates look a lot tastier up north especially for a new pass like myself and there is an oppurtunity.
Sooner or later, perhaps it’ll be a Labour rather than a Tory government that decides to just simply “scrap tax offsets outright” thereby nullifying the shrinking advantages of being Ltd Company, or any other kind of IR35 claiming Self-employed…
Now that hourly rates are enough above £10ph in most places, the “£1ph extra for self-employed at the cost of holiday/sick pay” no longer seems as attractive.
Holiday pay for PAYE is 12.07%, which is about £1ph extra for every £8ph base hourly rate, thus about £1.50ph extra on a £12ph base rate…
Why bother with £13ph SE compared to available £12ph PAYE which is clearly better, especially at this time of the year, where extra premia apply as well… 
There are loads of post on this subject if you look back, Its up to you. It was very good when it was the 10% flat rate scheme but now not so good. Wait until April to see if they going to enforce the IR35, if its the case it wont be worth the hassle setting up a company.
I would say don’t touch ltd company unless you understand it in full and you know what you are doing. Will you be better off? It would depend on the relative rates and how you structure the finances.
Consider the reasons why an agency might ask you to go ltd company. It costs them less and it could also claim that you are not eligible for equal pay after 12 weeks because you are self-employed.
You could incorporate a company, gain VAT registration then not really take any action. I do wonder how often this happens where people just don’t really administer their company and just take the money as paid. If you were to do this, it would be illegal and you may be lacking an NI stamp for however long you are doing so (could affect your state pension). You could end up with a large tax bill in the future. Forget about getting a mortgage if you cannot show taxable income.
Add to this also there can be unscrupulous practices by those wanting to employ self-employed people (not necessarily agencies). They could be creating false VAT invoices and claiming back considerable VAT from the government. This could be despite the fact that you are not VAT registered and did not charge VAT. I’m sure it happens and the gains will be enough to fund lavish holidays and retirement homes abroad.
People sign up for self-employment saying I will keep £200-300 a month aside and hire an accountant. When it comes to it, how often does the money get spent and oh dear they forgot to hire an accountant? Quite often.
Hi go and ask a few TAX EXPERTS or ACCOUNTANTS and get their opinions
the revenue love to change the goal posts every few years ie VAT now has to be paid 4 times a year insted of at the end of the year its extra cost and the margin is so slim to make it not worth it ( you become an unpiad tax collector )
the I.R 35 thing is a mess and probably be no clearer after april ( there is a lot of problems with freelance I.T. consultants , technical people in the tv and film industry and freelance presenters etc )
SUFCMark:
As the title says:Is it worth it?
Pros/cons?
Do you do it, if so why, if not why not?Rates look a lot tastier up north especially for a new pass like myself and there is an oppurtunity.
When you say the rates are tastier, you’ve got to add up that you have to pay your NI Employers contribution, the 28 days holiday per year your employer pays for, redundancy rights, unfair dismissal rights,
If the company goes under owing you pay and redundancy, you can get it paid by the government, if you’re self employed, you’re in the queue with all the other creditors getting a few pence of every pound you’re owed once the dust has settled.
You have to sort out your own NI and Tax contributions, cost of an accountant, although I think £200 to £300pm seems a bit high if your accountants aren’t overly complicated.
If the tastier rates are worth that then Ltd is the way to go, but I personally think for most agencies and companies that try and get their driver to be self employed, its to absolve them of their responsibilities as an employer, than to make you richer.
Something that I don’t think has been mentioned is if you go LTD you become a director which means you gave a raft of legal responsibilities.
Those include ensuring you’re paying the correct tax, accounts are sent in on time, accounts are truthful, and your company sticks within the law generally.
If you get any of it wrong they don’t just give you a slap on the wrist. Its fines, court or even prison potentially depending what you did / didn’t do and you are liable personally. Ok prison is extreme but its not to be taken lightly.
Plus getting money out is more complicated without getting taxed a lot, and winding the company up is even more complicated. You have to go through specific processes to wind it up and require accountants who know what they are doing or even insolvency practitioners if theres more than £25K in the bank (likely if you’re fiddling the tax for max gain).
Get it wrong and its fines and heavy tax bills. I’ll try to find the article about it I saw yesterday as a lot of people are having to do this.