ADVISE!!! LIMITED COMPANY

RE: ADVISE!!! LIMITED COMPANY

Alison Clare Hickman — Mon, 08 Jan 2018 20:54:37 GMT

https://www.gov.uk/self-employed-national-insurance-rates

Your 'profit' is the remaining balance left from your income less expenses. Refer to link for info re NI.

I will be totally honest with you... I think you definitely need to sit down with someone who knows how to do a tax return, keep proper income and expenses records etc etc... It is fairly straight forward once you know what to do but my fear is that you might get into a real pickle, or perhaps pay more tax than u need to, if u don't get help to start with. Asking questions here is ok, but only up to a point!

RE: ADVISE!!! LIMITED COMPANY

VetNurse Anon a/c — Mon, 08 Jan 2018 18:07:44 GMT

Thank you Chris and to everybody for all your advise!

It definitely makes sense Chris as did not get the whole limited company thing when it is just me!

I have registered with HMRC so just waiting for them to send the details over to me.

On my spreadsheet do I just log income and expenses and that's it?

I did read something about national insurance and that as self employed I will pay the basic class 2 NI of £2.85 a week something like that but also class 4 NI on any profits which I fail to see how that will be relevant to me as a locum nurse so just wanted to check whether I need to log profits and how you do this as I will just be earning a salary etc

Thanks

RE: ADVISE!!! LIMITED COMPANY

Chris Alderton — Mon, 08 Jan 2018 15:54:57 GMT

I think, which is understandable if you've never done it before, is that you're over-complicating things... the reality is a lot easier than it all sounds.

If you are a company director, managing a certain number of employees and having to operate a 'proper' business as such, then yes, becoming a Ltd. company, registering with Companies House, providing for pensions, dividends, corporation tax etc. is the way to go, along with getting an accountant to prepare appropriate quarterly and yearly financial accounts.

As a nurse locum, however, it just you, and only you, offering your services and getting paid for them. Simple is key as there is no need to make it any more complicated (unless you want to, of course) - any benefits to tax reclamation that you might get becoming a Ltd company are negligible at best, unless you are earning mega bucks, and I assure you that, even as a locum, this will not be the case! :-)

You can also quote me on this, that you will NEVER have problems finding work because you are self-employed - in 9 years of locuming I have never had an issue, I can't even remember it ever being mentioned by any practice I've ever worked for. The unfortunate truth is, is that the large majority of practices within the veterinary industry are not managed by 'professional' people in that field, and by that I mean that a lot of practice managers are ex-nurses, ex-vets, ex-receptionists etc. who have grown into that role, without any financial or managerial background or qualifications.

In my experience they are simply (on the whole) not that stringent when it comes to financial matters, and so tend to follow my lead when it comes to invoicing and payment etc. ... give them an invoice, QUOTE YOUR UTR NO. on the invoice (given by HMRC), and fill in a once-a-year tax return. It is no more complicated than that, really.

Yes, you will need to keep track of all your work-related income and expenses, in order to fill in that tax return, but that is an easy once a month job on a spreadsheet once you have it established. To be honest, most people as they get older, tend to (or should!) keep track of their finances regularly anyway, so it really isn't that big a deal.

Practices are screaming out for RVNs, which puts you in the driving seat - you can look around for work, so they need you more than you need them :-)

RE: ADVISE!!! LIMITED COMPANY

Sal the 1st — Sun, 07 Jan 2018 22:49:34 GMT

I know its a while ago but i had no problem at all, the problem was getting a break in between bookings

- in fact I was making it a rule that I booked no further than 6mths in advance. I think you will find that a lot of practices will bite your hand off at the chance of locum cover without agency fees.

RE: ADVISE!!! LIMITED COMPANY

VetNurse Anon a/c — Sun, 07 Jan 2018 19:55:57 GMT

I have just been looking on line in the difference of working as a sole trader so self employed or as a limited company and the sole trader one is definitely much simpler esp for me that doesn't have a clue where to start or what to do and the paperwork and accounts side of things for a limited company I am struggling to get my head around so worry I will make a mistake.

I am just concerned still like others have mentioned that I will struggle to get work as a self employed locum as it said on this side that many clients and agencies will avoid a contractor that is self employed and only use those who are a limited company or through a umbrella company!

So those of you who locum as self employed how easy do you find it to secure work!

RE: ADVISE!!! LIMITED COMPANY

r-more — Sun, 07 Jan 2018 18:43:04 GMT

Ltd co is not automatically more tax efficient than self-employed, it becomes more tax efficient once you reach a certain turnover/profit level and also depends on the value of dividends you are taking.

In terms of a Ltd company, you would raise invoices (make sales) though the company, deduct any costs associated with the work, deduct a basic salary and the remainder will (hopefully!) be a profit. Then corporation tax is paid on these profits and what is left over after the corporation tax is deducted can be paid out as dividends. You would then pay tax on the dividends. You can take dividends at anytime, providing there is sufficient profits made in the company.

At the end of the company’s financial year you would have to file accounts with Companies House and submit a corporation tax return to HMRC. You will have to do personal tax returns (to cover dividends etc.) for each tax year, which runs from April to April. In terms of company accounts, these must be prepared and submitted to particular requirements, and tax returns (particularly corporation tax) can be tricky too, so you may need an accountant. Also, there are other (albeit more straightforward) forms that need to be submitted on occasions to Companies House.

RE: ADVISE!!! LIMITED COMPANY

VetNurse Anon a/c — Sun, 07 Jan 2018 17:47:12 GMT

Thanks for comments!

I think I would prefer the limited company route just because I am going it over a long period of time and is the most tax efficient way of going it and will have a higher take home pay and can claim expenses.

I think it's the dividends that make it sound complicated as don't fully understand how they would

And I just don't understand how to do the account bookkeeping side of things!! Which I would still need to do as a sole trader. Do I do this monthly or annually

Basically how often do I send stuff to HMRC?

RE: ADVISE!!! LIMITED COMPANY

Chris Alderton — Sun, 07 Jan 2018 00:43:49 GMT

I agree, there is no need to make things difficult and give yourself an unnecessary headache! Go simple.

I don't even go near locum agencies either as they can limit your earning potential...if a practice doesn't have to pay agency fees, I can charge that little bit extra.

Basically, my advice to any locum is: find an area or travel distance that you're prepared to work in/travel to; go on the RCVS website and find every single practice in those areas; send your CV to or email every single one.

Don't let others do the work for you that you can easily do yourself.

Register as self-employed, send out invoices, pay N.I. contributions throughout the year via direct debit, fill out an end-of-year tax return before Jan 31st...simples (although DO get your head around payments on account and be prepared for it after the first year of being self-employed - basically tax payments IN ADVANCE for projected earnings - it works out in the end, but you could be in for a little shock first time you pay it lol)

RE: ADVISE!!! LIMITED COMPANY

Sal the 1st — Sun, 07 Jan 2018 00:24:57 GMT

I never had a problem finding work either but heard of others who did. I think there were a lot of scare stories put out by a couple of locum agencies way back which started all this dependency on umbrella companies - they really aren't necessary and the paperwork side is only as hard as you want to make it - I found the HMRC workshops were very useful to get you started (and free).

I knew about the holiday entitlement too if you go PAYE

RE: ADVISE!!! LIMITED COMPANY

Chris Alderton — Sun, 07 Jan 2018 00:12:58 GMT

Just a quick note to Sal's earlier response...I have never had any issues with getting employment because I was self-employed and not under an umbrella company (which is why you should always quote your Unique Tax Ref on any invoice you submit, to show the practice that you are self-employed and pay N.I. contributions).

If there are any issues, however, then by all means offer to go on their books and be paid via PAYE (as any normal employee is) and get tax/N.I. deducted as source (this will then have to be taken into account when you do your end-of-year tax return as you don't want to be paying tax twice!), but then ensure that everyone involved knows your rights as a PAYE 'employee' e.g. you would then be legally entitled to paid holiday, whereas this wouldn't normally be the case for self-employed persons - no work, no pay generally!

To my benefit, one company has been caught out by that useful nugget of information...10 days paid holiday accrued later and they quickly took me off PAYE and asked me to invoice them from then on!

RE: ADVISE!!! LIMITED COMPANY

Chris Alderton — Sat, 06 Jan 2018 23:53:12 GMT

The simplest way to locum, in my experience, is to become self-employed and act as a sole-trader, whereby you literally are your own company. I've been locuming for 9 years and have never had any issues with HMRC this way.

I send an invoice to the practice I've worked at for the gross amount, quoting a unique tax reference no. (given by HMRC), and then at the end of the year fill in a tax return with any relevant expenses (travel mostly).

There is no need to even think about umbrella or limited companies, unless you want to make your tax that little bit more complicated...you might be able to claim back a little more that way, but for the amount of money you'll be earning (compared to a self-employed I.T. expert or something) there really is no need to go down any other route.

Regards,

Chris

RE: ADVISE!!! LIMITED COMPANY

VetNurse Anon a/c — Sat, 06 Jan 2018 21:55:50 GMT

I think I just need it explaining to me in simple terms as it's all getting a bit confusing now!

My dad is self employed and does his own books and accounts so can just ask him if get stuck on the maths side of things

From my understanding I can only work as a locum either as a limited company or through a umbrella company!

I have been advised that I would register it with companies house and register HMRC for tax!

I was than advised I can take a low basic salary and not pay NI or tax on that and the rest put as dividends (But I am just a bit unclear how I will register this as been told I have to declare all dividends, also do I do it weekly, monthly to declare earnings and dividends to HMRC)

I understand I will still pay tax on Dividends but is that annual so is it taxed at the rate of how much dividends accumulated over year. Also can I tap into the funds throughout the year as long as enough left over for tax

Can you offset expenses still as a limited company and does that still count for tax taken out of dividends!

How often do I need to send stuff to HMRC and what do I need to send. Is it done just on a annual basis or is it done every time I get paid which is weekly.

Just need a step by guide really that I understand than will be fine...

Thanks

RE: ADVISE!!! LIMITED COMPANY

r-more — Sat, 06 Jan 2018 13:17:36 GMT

A Ltd company is a separate legal entity, you would provide your services via the Ltd company, it is not the same as being self employed (”sole trader”). Self employed basically means you as the business, a Ltd company is a separate legal entity.

if you go down a self employed route, you’ll need to register as such with HMRC and do annual tax returns. Ltd company would mean registering a company with Companies House and making annual returns (mainly accounts) and making Corporation Tax returns to HMRC for the company and the company would pay tax on its profits. You would pay tax on any profits (dividends) you take out of the company, although most company owners who work through a company also take a low salary. You don’t have to have an accountant, but unless you are skilled at accounts production and tax you will need to use one. It is also worth engaging an accountant in the first instance for advice as there is a “tipping point” when a Ltd company becomes more tax effiencient than being simple self employed.

RE: ADVISE!!! LIMITED COMPANY

Sal the 1st — Fri, 05 Jan 2018 21:52:28 GMT

well its a little while since I did it but I rang the tax office and asked them about self employment, they sent me all the bumpf, advised me when the next workshop was when I could learn about keeping my own books and doing tax returns and the sorts of things that could and couldn't be claimed. I paid my NI quarterly at the post office. Bought myself an invoice book put on the bottom of my invoices that I accepted responsibility for payment of income tax and NI and that was basically it. To play it safe I used to put 25-30% aside for tax/NI and a little more aside for rainy days. Never used an umbrella as I refuse to pay somebody else what I can do myself. A lot of practices won't employ locums without an umbrella in case they get stiffed for tax/NI at a later date but if this is a problem just ask them to put you on their books for the duration of your job. TAX and NI will then be deducted at source so everybody is happy

If you go Limited you will need to use an accountant

RE: ADVISE!!! LIMITED COMPANY

VetNurse Anon a/c — Fri, 05 Jan 2018 21:22:58 GMT

Hey Sal the 1st

I thought limited was self employed!

I was just told there was two ways of doing it either through a umbrella company or to set up as a limited company.

Umbrellas just ain't worth it financially as they are taking most of my salary for their cuts! So was advised to go limited but I will be self employed it just means me doing my own books and tax returns so just need advise in getting started than I will be fine!

RE: ADVISE!!! LIMITED COMPANY

Sal the 1st — Fri, 05 Jan 2018 21:18:17 GMT

could you not just go self employed - that is how I did it

RE: ADVISE!!! LIMITED COMPANY

Alison Clare Hickman — Fri, 05 Jan 2018 20:04:16 GMT

hi Anon, send me a PM with ur email address and I will send u an article (blog) I prepared re setting up as a Ltd Company...

Regards

Ali h

RE: ADVISE!!! LIMITED COMPANY

VetNurse Anon a/c — Fri, 05 Jan 2018 19:47:55 GMT

Also they ask for a company name but obviously it's just me so not sure on that one....