IR35 and its ways
As a contractor you may think that IR35 has been created just to mess you around; to trap you in its web of sticky legislation, leaving you a helpless contractor fly unable to struggle free as the HMRC spider slowly picks it way towards you…
Legislation
If you are a beginner in the big bad world of contracting, you may feel unsure of what every piece of legislation that gets thrown your way actually is. IR35 is the one piece of legislation that’s worth understanding, because get it just right and you’ll be taking home a lot more pay!
What brought about IR35?
Basically, IR35 was brought about by the government to stop contractors being naughty and working as permanent employees under the disguise within a limited company. Basically, people were trying to claim as many benefit as possible whilst maximising their take home pay – shame on them, tsk! In laments terms, IR35 levelled the playing field for permanent employees seeing that they were getting a bad end of the bargain – when they were looking at contractors who functioned within a limited company getting their benefits whilst assuming far less responsibility. Ergo, if you have the same responsibility and benefits as a permanent employee you will be found to be inside IR35. HMRC will thoroughly investigate your company if they are trying to sniff you out, including your contract and applied working practices.
Time spent on a client does not make a difference to your IR35 status – it is simply the nature of work and the details within that count.
Your Contract
It is heavily advisable that when you receive your contract you get it reviewed. In the UK, there are 3 firms which actually supply information to PCG about IR35, which means they are pretty good at dishing out IR35 advice. Find a firm with an IR35 specialist and you’re golden – a good specialist will be able to review your contract in an hour or so.
After you find out whether you are inside or outside of IR35, you can then consult your contractor accountant to find out what you can do to maximise your take home pay.
Invoice Factoring Info for Restaurants
Owning a restaurant can be a full time job. It is unlike other jobs in that you are generally always running between the kitchen and your clients. You have to make certain that you have enough food for whatever dishes are on the menu. It means a good relationship with suppliers is imperative. If you start to pay your invoices late to your suppliers they may start to get worried. There is always a cycle in business. If you cannot pay you tend to make your clients and your suppliers worried. The only way to keep everything in the status quo column at the very least is to have a steady income.
To get a steady cash flow you have many options. One option is of course to have many consumers so you never have to worry about the expenses. Restaurants tend to be seasonal, especially fine dining establishments. With slow periods an owner may struggle to pay the bills unless they make enough during a busy time. Things such as loans can be of help in a pinch, but it does take a while for bank loans to be processed.
This means you might have to look for alternative methods of loans. Invoice factoring is one option. The following will help you understand the invoice factoring info you should know to make a concrete decision.
Invoice factoring requires you to sell your invoices to the factor. Most require you to sell all of your invoices to the factor, but in some cases you can sell just the ones that are always paid late. It will depend on the factoring company, so this is a question you need to ask. When you sell your invoices to a third party they become the collector of the debt. They will do the work to make certain you obtain the money that is owed.
They will also keep 100 per cent of the loan. They do so because the factor generally sends you 85 to 90 per cent of the invoice in a direct deposit. In other words you keep 85 to 90% of the invoice, but you get it ahead of time. This is why when payment is actually made by the client you do not have to pay back the loan you were given. Additionally the other 10 to 15% is considered the fee for the cash flow you received.
Credit Card for Bad Credit – Is It For Real
Credit card for bad credit – Introduction
If you are suffering from your past financial mistakes, you need to read this article. Your bad credit can sting you for a long time. People who had to file bankruptcy or lost their homes can relate to what I am saying here. However, getting a credit card is not difficult even if you have bad credit. People with a FICO score of 500 can get credit cards. Applying for a secured credit card is the first option. These are some of the offers made by many national banks such as Capital One, Bank of America, Orchard Band and many others.
They will offer you a credit line based on the money that you have in your savings account. If you pay on time, they might increase this amount in the next six months. They will also report your performance to the credit bureaus every single month. Your credit score will start to boot over time while they do this for you. You can even go to your local bank an open up a credit card using your savings account as collateral. Most banks do not offer bad credit credit cards. This is why this option is the only one for many of us.
Most banks offer you the option to use your savings account as collateral. They can do it because they are protected from any defaults in the future. If you do not pay on time, they will just get their money from your savings account right away. If you want to re-establish your credit, this strategy can work very well. This will help you repair your credit score. If you have been considered a high-risk applicant for any loan, you can use this strategy to boost your credit score. You can go online and get an instant approval of your credit card even if you have bad credit. (more…)
Moving from permanent to contracting and using a contractor accountant
Contracting has always been popular, however due to the uncertain economic times many more are making the move to contracting. There are a host of benefits, such as: financial rewards, control, flexibility, development of skills, opportunity to see the world (contractors are far more mobile), ability to see what different employers are like both public and private sector etc, to be honest the list is endless. Sure you have to give up the perceived security of permanent employment, like final salary pension schemes, paid annual leave plus the exciting bureaucracy that often exists in many companies, but once you have secured a contract and made the scary leap many find it rewarding.
The first step when making the move is to find a contract. Despite the current state of the economy, there are still contractor roles available. Finding a contract is a fairly similar process to finding a permanent role. Firstly, you should update your CV, listing your last two positions and explaining your achievements within them. Focus on skills that you think will make you stand out as a contractor. Make sure to target recruitment agencies that specialise in your chosen field CW Jobs and Technojobs are good places to start with.
There are two ways to operate as a contractor – limited and umbrella. Essentially, umbrella companies are ideal for short term, lower value contracts – and Limited companies are best suited for contracts longer than three months, or where the annual salary is more than £25,000.
Your take home pay will be between 60% -65% of your contract value with an umbrella company. It’s very similar to how you would have worked as a permanent employee. With a limited company your take home is much higher at 75%-80%, but there is a certain level of administration involved.
Once you have found a contract you need to establish your IR35 status. You should check this before you sign your contract to confirm whether you fall inside or outside IR35. The idea behind the IR35 legislation was to stop permanent members of staff switching to contracting but still keeping all the same benefits and working practices, while taking home much more money.
The best way to determine your IR35 status is to have your contract reviewed. Some accountancy firms offer complimentary initial review services. If you are inside IR35, you will take home a lot less money. However, you may still find it worthwhile financially to work through your own limited company if you are inside IR35, as you can still claim some expenses, benefit from the Flat Rate VAT Scheme, and only pay tax on 95% of your contract.
Choosing a contractor accountant is relatively simple, ask around and see who people recommend you could use a high street accountant but like doctors accountants often feel comfortable dealing with certain types of clients, high street accountants are often geared for slightly larger clients with more than just one employee. Whereas specialist contractor accountants mainly deal with one person limited clients.
Make sure you choose the right kind of contractor accountant though, the market has exploded due to the increase in the contractor market, there are online only and telephone only companies and companies who provide clients with their own accountant that they can actually meet and who help the contractor with their contracting career and commercial goals. Look for firms that have been around a while and whose marketing claims are backed up by credible third party claims, look for awards by nationally recognised organisations like Accountancy Age, National Customer Service organisations and maybe even the PCG and not just other websites you or your contracting colleagues have never heard about.
Fees are broadly similar with both basic telephone and dedicated contractor accountants, so choose wisely or you could find yourself having to deal with somebody who hasn’t got a clue who you are or what you want from your contracting career. Basically you’re looking for a nationally recognised company with local representation who charges similar to other firms.
How much are you at Risk from Identity Fraud?
National Identity Fraud Prevention Week also known as (NIDFPW) has just celebrated its seventh year anniversary. It aims to prevent identity theft and fraud through raising awareness of this serious crime to both individuals and businesses. Every year the NIDFPW has used people from the public and the private sector to inform the public through the media about the latest threats and scams.
What is Identity Fraud?
Identity fraud is a serious crime and not only affects individuals, but also businesses. Despite being a highly publicised issue many people and business don’t take the appropriate steps to safeguard themselves against identity theft. According to CIFAS, the UK’s Fraud Prevention Service, 7% of the UK population, just over four million people, have been victims of identity fraud – with the average cost to each victim at £1,190 equating to over £47 Million in total.
The number of reported cases in the UK continues to rise year-on-year with over 80,000 reported in the first nine months of 2011. Despite the risk, CIFAS suggests that 25% of people are still not taking simple and key precautions such as shredding bills and bank statements that can help prevent identity fraud.
How to check whether you are at Risk from Identity Fraud
To discover whether you are at risk from Identity Fraud you can use an online risk assessment tool. This tool will allow you to enter your current circumstances though a number of straightforward questions and give you guidance as to whether you could be at risk from identity fraud and what measures you can take to safeguard yourself.
You could also perform your own check by referencing your position against the checklist below. Score yourself 1,2 or 3 for the following questions; 1 being no, 2 being sometimes and 3 being often.
- Do you ever leave your debit/credit cards unattended or out of sight?
- Do you throw away unwanted documents, letters or other things with your address on without shredding them first?
- Have you opted out of having your details available on the edited electoral roll?
- Do you carry out transactions on public or shared computers?
- When moving place of permanent residency have you informed the post office so your mail gets redirected?
- Have you ever purchased something online that’s address did not begin with https and the browser did not display the “closed padlock” symbol?
- Do you discard receipts without keeping them for reference against bank statements?
- Do you use the internet without active virus software?
- Do you write down your PIN or passwords?
- Have you ever replied to emails or phone calls claiming to be your bank asking for personal details?
Now add all of your scores together to discover how at risk you are from identity fraud.
25-30 – High risk – If your score is between 20 and 30 then you are at more risk of identity fraud so make sure you follow the correct guidelines and help protect yourself from identity fraud .
20-25 – Medium risk – You may be taking some of the correct precautions but you still need to look at the guidelines and make sure that you are doing all you can to prevent identity fraud. Getting fraud protection insurance is recommended to ensure you are kept protected.
10-20 – Low risk – Following the correct precautions should keep you safe from most types of identity fraud but the only way to make sure you are fully safeguarded is to take out insurance.
10 – No risk – If you got a total score of 10 then you are taking all of the correct precautions and you should not be at risk from identity theft. Although you are currently low risk there is still a possibility that you could have your details stolen i.e. via institutional theft or data loss, so make sure you keep up-to-date with National Identity Fraud Protection Week each year.
Use Life Insurance Comparison.uk.com and save your money
Please never buy life insurance from your own bank, instead I saved more than £134 per year buy using Life Insurance Comparison.uk.com
Sitting in an airport lounge waiting for a flight connection is probably the dullest way of spending time I know, apart from waiting for the AA which is also up there in my list of things I would do less than go to have root canal work done by an inexperienced dentist. The process of waiting for a plane however can be transformed by WiFi which if you are lucky enough to be able to access from one of the comfy seats rather than the wooden seats in the Starbucks franchise is all the better almost making the whole process bearable. With two hours to kill I sat down and decided to work though as many emails I could, so reducing the time I would have to spend doing this at home. On this occasion this was all going pretty well with the delete button being pressed at an ever increasing rate until I came across an email from my travel insurance provider letting me know that the cost of my renewal would be about ten pounds more than I had paid the previous year, although the increase was affordable I thought that it would be worth spending a couple of minutes getting an alternative quote as, lets face it, what else did I have to do for a few minutes? As it turned out I could save myself ten pounds on the annual premium I was currently paying. Once you’ve saved a few pounds you get a taste for it. On another table along the top of the web page I could make a Life Insurance Comparison, find critical illness cover and other financial products. Saving money or rather stopping yourself wasting any more money is a tremendously empowering feeling and rather addictive.
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Having always been an advocate of the fixed rate mortgage since buying my first home some twenty two years ago, I have only recently reached the end of a five year fixed-rate mortgage which, in retrospect wasn’t the best deal I have ever signed up for. Although the interest rate was not stupidly expensive it certainly meant that I wasn’t as well off as I could’ve been for a number of years, although I have to remind myself that the reason I elected to fix the costs was just in case the costs of borrowing sky rocketed leaving me with an unaffordable mortgage and the potential for repossession. What I have done, however, is to change the things I can change and decided that the mortgage was a thing that I couldn’t change so I wouldn’t cry over spilt milk. The comparison websites that dominate every advert break truly hand control of people’s money back to the people and I love the democratic way that the masses can vote with their feet and walk away from companies that they deem to be too expensive and move to companies that appear to be more welcoming, at least initially that is. I am aware that these companies do seem to lay on the charm to entice people into their lair after which they will try to increase the costs for the unsuspecting, but I intend to move my business to a new home when I begin to feel that they are trying to take me to the financial cleaners. I regularly sit down and review all my finances by logging on and getting a quote for life insurance on a website called life insurance compare and check to see if my electricity and gas suppliers haven’t altered their tariffs to a rate that benefits them rather than me.