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FAQ - Page 2

Do I still have to pay 123 Contracting if I don’t work for a month?

Yes we’re afraid so. We are just like your car insurance, our monthly fee is just our annual amount broken down into 12 monthly payments. However, if you decide to leave 123 Contracting at any time, all you need do is give us one months notice and cancel your standing order. There are no exit penalties.


What is IR35 and how does it affect me?

IR35 is a piece of tax legislation. It's aim is to try and differentiate between genuine contractors and “disguised employees” who are using the contracting system to save on paying tax. It has been found that in the overwhelming majority of cases contractors are NOT “disguised employees”.

Providing you have a contract that is outside IR35 (we can review each of your contracts for you and confirm this) - and your working practices reflect that of a standard business and not that of an employee - you will be fine.

If your contract and working practices give the impression that you are inside IR35 legislation, you will have to pay full tax and National Insurance, as well as claim reduced expenses. This basically means that you will earn less money.

Our IR35 Contract Review is in place to help you ensure you are outside of IR35. For a small one off fee we will review your contract in detail and advise you on what changes you need to make, we advise all clients to get their contract reviewed by our specialists.



If I am inside IR35, is there any benefit in contracting through my own limited company?

Even if your contract and working practices are inside IR35 you can still claim:

  • Employers National Insurance Contributions
  • Employer contributions to approved pension scheme
  • Professional subscriptions
  • Professional indemnity insurance
  1. Benefit from the VAT flat rate scheme which, on an average contract, will save you around £2,000 a year
  2. Receive interest on the funds held within your own business.

Yes, from a financial point of view it is still worth it. Secondly, any other contract work you undertake that is outside IR35 can be put through your Limited Company.


How do I form a Limited Company, does it take long and when can I start to pay myself?

You can form your Limited Company in five minutes through our website and your company is usually set up within a few hours. If you are joining The 123 Way then there is no fee.

As soon as your business bank account is open you can receive payment from your clients. You can then transfer money from your business bank account to your personal bank account each month, or whenever you like. We will help you to understand how much you need to put aside for tax and what expenses you can claim.



What insurances will I need?

This is completely up-to you but you’ll probably need:

Professional Indemnity Insurance which costs around £155 per annum depending on what you do. This provides financial protection for you and is designed to meet the cost of defending claims made against you.

Public Liability Insurance which costs around £105 per annum. This protects you against third party claims for injury or damage to people or their property.

Both of the insurances above are claimable expenses through your business.



How much does 123 Contracting charge?

The main components of The 123 Way are:

- Full initial business review - what is best for you!

- Your accountant, speak to the same person every time

- Incorporate and register your Ltd Company for free

- Setting-up a company bank account

- Year end statutory accounts, prepared and submitted to Companies House & HMRC

- Corporation tax return & computations prepared & submitted to HMRC (Ltd Co. only)

- Payroll registration (if required)

- Running your company’s monthly payroll and year end filing of P35, P60 forms

- Dividend administration (Ltd Co. Structure only)

- HMRC & Companies House compliance

- VAT registration (if required)

- Completion of VAT returns and submission to HMRC

- Completion of Annual Return and submission to Companies House (Ltd Co. Structure only)

- Bookkeeping software (incredibly easy to use) OR we do your bookkeeping for you

- Ongoing help from us & access to our specialist IFAs

- No sign up fees, no contract and no tie-ins - 100% service!

This is all provided for a fixed monthly fee of £75 plus VAT, which is one of the lowest prices in the market. It is also, of course, a claimable expense through your business which reduces your Corporation tax liability.



Am I tied into a contract with 123 Contracting?

There are NO entry fees, exit fees or tied-in periods you simply need to give us one months notice if you intend to leave, this ensures a smooth hand over period.



How do I appoint 123 Contracting?

Appointing 123 Contracting couldn’t be simpler and takes just 5 minutes! Either fill out our online Join The 123 Way form or call us on 0845 834 0269.


Disclaimer:

This information is for general information only. We take no responsibility for any action taken or refrained from in consequence of its contents. Always seek our professional advice specific to your circumstances before acting.