However, we now have a solution for you that will enable you to fulfil the HMRC requirements and make a claim for a tax rebate.
There are various methods that can be adopted depending on individual circumstances. Below are a table of examples that show the methods that can be used and examples of returns that can be achieved. Of course, each person’s circumstances can be slightly different so the examples are guides. If you would like an example specific to you then please get in touch.
Even if you find that you are not eligible for SED in one year it may be that one of these methods is still be more beneficial than the normal self-employment route. Ask us and we will try to find the right solution for you.
It works like this:
- Our umbrella company invoices your agency or client.
- We collect the payment and then pay you after making the deductions for PAYE/NIC’s and our fees.
- You submit monthly expenses (with receipts) and we reimburse these to you along with your salary.
- Each month we will provide you with a payslip and a P60 at the end of the tax year.
What our fee includes:
- The invoicing, payroll and payment process as detailed above.
- End of year self-assessment tax return and/or SED claim.
- Fee Insurance Protection. This covers our fees should HMRC make an enquiry into your SED claims or self-assessment tax returns.
What it does not cover:
Professional Indemnity Insurance. You will need to provide us with a copy of your insurances. We can arrange a quotation and cover for you should you need it
- A Limited company can be effective and provide flexibility if you cannot be certain of eligibility for SED on an ongoing basis.
- Complete ownership and control.
- Generally less tax-efficient than the Umbrella Company solution.
- Risk of IR35 legislation and related HMRC costs.
- More expensive fees for accounting and tax reporting.
- Complete personal responsibility for company legal and statutory requirements.
- Higher administrative burden.
- A business bank account is required and for you to manage payments.
If this option is still attractive to you then we can provide a full service package to take away the administrative burden for a fixed (tax-deductible) fee of £175.00 per month.
Our monthly service package includes:
Bookkeeping of up to 2 hours per month to include:
- Issuing and processing sales invoices
- Processing purchase invoices and expenses
- Bank reconciliations
- Monthly payroll production – payslip and advice of PAYE/NIC’s payments required
- Production and filing of company Annual Accounts
- Preparation and filing of Corporation Tax
- Preparation & filing of year end payroll returns
- Tax and accounting advice for the UK company and UK-resident directors to minimise liabilities.
- Preparation and filing of one Director’s personal tax return/SED claim
- Preparation and filing of company Annual Return
If you have any further question then please call us or send an email.
|Examples and comparison of pay methods available (annualised examples)||Umbrella Company Pay Calculation||Standard Limited Company||Standard Limited Company Inside|
|Invoiced to agency/client||51,750||51,750||51,750|
|Other income – Flat Rate VAT Savings||1,759||1,759|
|Limited company profit||35,439||1,232|
|Funds available for dividends||27,997||973|
|Salary after Tax & NI||31,114||9,655||30,156|
|Net income after tax||34,114||12,655||33,156|
|Claim for SED||8,529||967||7,879|
|Net annual take home pay||42,643||41,619||42,009|