...not sure about that: Honestly, I find all the company legal stuff and tax arrangements a real nightmare. I got my accountant to sort all that stuff out for me with Companies House (there is a small fee involved - even my accountant only charged me £20 or so to do all the donkey-work for me).
That is perhaps my single best bit of advice, which WILL save you the most money in the long run: If you have not done so already - get yourself a good accountant - a small local independent is likely to be your best bet.
Now that you are self-employed (or will be if you go ahead), you will be amazed at what you can claim tax-relief against, that you cannot as an employee, eg: mileage at 45p/mile and/or other travel expenses to/from your place of work, as well as any travel whilst you are at work (I assume you will be based from home), meals at work, and even a proportion of your gas/electric bill for running your 'home office'.
Fancy a new laptop, camera or any other equipment ...keep the receipt: it all counts as work-related expenditure, which in turn you can claim tax relief against. (May also worth you looking at going VAT-Registered as well, especially if you think you will need to get a lot of extra kit initially).
You should let your accountant know about your IVA, and instruct them to advise you on the most tax-efficient way to keep as much of your income as possible, whilst making your earnings look as small as legally possible on paper (thus minimising any increase in your IVA repayment).
Example: I typically turn-over £50K, but after the accountant works his (totally legal, I hasten to add) magic, I have a 'taxable profit' of around £30K. It is the taxable profit that your IP will use to calculate your contribution NOT your turnover. The great part is that I get to keep a lot of that 'spent' £20K.
Realistically, working in this way, for every £1 that I turn-over (or earn 'gross'), I take home 83-86p.
My IP asks for my most recent accounts and bases my income on those. You of course will not have your first set for at least another 12 Months, so you may have to ask your accountant to produce a 'profit forecast' based on your own circumstances. Your IP should accept this, but check with them to be sure.
Is it worth it? If you feel that there is plenty of work about in your line of business, and the money is good, then maybe. BUT remember, you may be earning more, but you lose ALL employee benefits: pension, sick pay, holiday pay etc. Personally, I feel it is worth the risk, and am fortunate enough to have stayed gainfully self-employed for the last 7-Years. But I never get used to that feeling of not knowing when the next money is coming in when a contract is coming to an end.
Best of luck whatever you decide.
Last edited by
UpToMyNeckInIt on Tue Jan 21, 2014 8:33 am, edited 1 time in total.
My opinions are just that: Based on my experience and being a self-employed IVA customer.
