PAYE

At Saymore we are experienced enough to know that contracting can seem like a legislative minefield for a even seasoned contractor, let alone anyone venturing into the industry for the first time. So if your head is spinning and you are thinking about throwing in the towel, stop worrying, we are here to help you make the right choices by giving you the best advice possible, based on your individual circumstances.
Anyone can set-up a Limited Company, although, this comes with a whole heap of administration and heavy responsibilities (which are discussed below). Only contracts that are truly outside of the IR35 legislation will benefit from setting up a limited company. Any contract that is deemed employed (falls inside IR35) would lose the right to use salary and dividend as a payment option, therefore reducing their tax efficiency. We know this sounds complex, so we suggest you contact a member of our New Business Team on 01992 279 759, who would be happy to provide you with assistance and advice in understanding this important step. Alternatively you could check out the IR56 section.

Here are the pros and cons of PAYE Umbrella and Ltd Co.
Whether you are still wet behind the ears and this is all new to you or you have been contracting for years, an umbrella company like Saymore is an extremely simple option if you just can’t face all the hassle, admin, tax-related issues, stress and responsibility of running your own Limited Company.
An umbrella company acts as an employer to independent contractors who work under temporary contracts, usually through an employment agency, but also directly with end clients.
As a Saymore employee, you are really looked after. We do all your invoicing, chasing and collection of payments from your agency or end client and calculate your tax and NI contributions at source. What’s more, we'll advice you on which business expenses you can legitimately claim. How much simpler could it get than that?
Umbrella Companies like Saymore are incredible at offering contractors a first-class work/life balance, because they remove most of the usual administration, paperwork and hassle associated with running your own company, without losing the financial benefits this style of working provides.
Saymore Umbrella is fast becoming the safest, most reliable and efficient choice for both contractors and agencies. The reasons for this are numerous:

• IR35 and MSC legislation is irrelevant as all income is processed and paid through PAYE.
• You can relax, secure in the knowledge that we are taking care of all your legal, contractual and tax obligations.
• We will advise you on what business expenses you can legitimately claim. Put simply, this means you will typically take home a higher percentage of what you earn compared to being in permanent employment or by being paid through a basic PAYE arrangement with your employment agency.
• You spend far less time and effort on admin compared to running your own company.
• You will always be paid quickly, accurately and on time.
• You will always be fully insured for the work you are carrying out, because you will be covered by our Professional Indemnity and Employers/Public Liability insurance package.
• You will enjoy full employment status and a legitimate contract of employment.
• You will benefit from the support of our HR professionals who are on hand to deal with any employment disputes or breaches of contract on your behalf.

Sometimes referred to as Personal Service Companies (PSC), they are only really beneficial if your working practices can be described as true self-employment. To obtain confirmation of this you would need to have the contract between you and the end client assessed, along with your working practices.
We would never deliberately set out to scare anyone, but if you trade as a Limited Company and are found to be Deemed Employed, all the underpaid tax you have inadvertently saved by disguising your employment will become payable along with the fines that would certainly be imposed on you by HM Revenue & Customs. If you are unsure about you position on this, check out the IR35 and IR56 sections of our website for more info.
The flip side of all this doom and gloom is that if you really are self-employed, running your own company could result in higher net returns after tax, which sounds great, but (why is there always a but), it also means you have a whole new set of responsibilities to deal with. If these responsibilities are not met, they carry penalties and fines, so you must ensure you are properly organised.
Running a Limited Company brings with it the following responsibilities and you would -

• be a Director of your own company and must keep Companies House informed of your tax and legal status
• have to employ the services of a good accountant
• potentially become VAT registered if earning over 60k per annum.
• have to spend time producing detailed accounts, invoicing and VAT records
• be responsible for submitting accurate tax returns and paying the tax on time
• be responsible for invoicing your agent or end-client. You will also need to chase the payment of outstanding invoices
• be required to respond to communications from accountants, HMRC, Companies House and numerous other organisations
• have to set up a separate business bank account
• have to ensure that all payments to HMRC are correct and made on time. Failure to do so attracts rather heavy fines and penalties
• be required to complete an annual self-assessment tax form
• be responsible for paying the tax liability on your final dividend when invoiced by HMRC. Failure to make this payment on time will result in additional fines and penalties

We understand that this may be a lot to take in so if you do need any advice or have any queries at all, please do not hesitate to contact us on the number below.