Good Afternoon All,

I am still looking for work 3 months after leaving and I have decided to widen my net to include contract jobs. Can anyone on here with experience of contract work give me some advice with regard to the financial aspects of this - in particular the IR35 rules regarding tax and also NI payments.

Many thanks in advance

Berlin

I have also posted this on the financial forum too.

I'm self employed doing contract work.
I have been informed that IR35 rules apply to Ltd companys, if you stay as sole trader then it doesn't apply. As for NI you need to pay tha if you are a sole trader but not if you are Ltd. NI is only a couple of quid a week, you can set up a DD online to pay it as you go along or you can get a written bill in the post and pay at the PO
IR35 is if I understood it properly is a rule that says you should be working for 3(?) different companys in a given tax year. If you only work for 1 then they should be employing you properly. Stops 1 man bands setting up as Ltd Coy and avoiding big tax bills. There are a lot more things that you can claim for if Ltd.
Advice I was given by a decent accountant was to keep receipts for everything!!! Declare everything, it will bite yo otherwise. And try and avoid the VAT threshold, which is 73K I think. People who I work with on contract talk of earnings anywhere between 60-90K last financial year.

HTH

Originally Posted by RE-DSO

I'm self employed doing contract work.
I have been informed that IR35 rules apply to Ltd companys, if you stay as sole trader then it doesn't apply

Whoever told you that was talking utter balls, especially as most companies won't sign a contract with a sole trader; ie you have to be Ltd or part of an umbrella company.

If you want a proper run down on the rules, regs and tax implications of working as a contractor then go to contractoruk.com which has huge amounts of accurate info for every possible scenario. It's IT based, but applies equally to other industries.