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I'm being laid off after 26 years working for the company I've been with since I graduated. The good news is that I think I've got myself another job - but it will be with a foreign company who don't have a uk presence. I will be self employed and send them a bill for my "fee" and expenses each month.
I obviously need an accountant since this is all baffling to me - I've already relied on company payroll.
I spoke briefly to one accountant who said that I should get myself a van/pickup instead of a car since I can depreciate the cost over one year. (I've always had a company car, but now obviously have to buy my own). I will be travelling mostly outside the uk for work - I suppose I could be driving around the uk a few times per year to visit potential customers. However, I'm going to be a sales person - not a mechanic, so I don't see how I would justify a commercial vehicle if the tax man ever started asking questions.
Any advice?
Not the cheapest accountant by any means, but they have useful resources on the self employed / freelance route - http://www.sjdaccountancy.com/
Quite reasonable accountants though.
If you set up as your own Ltd company you can get a company car still, although rules I think are a bit more limited than they used to be. Maybe van still gets around this as it would be the company van for business use and benefit in kind doesn't theoretically count. So long as you can prove you don't use it for personal use 😉
Do you want to be driving around in a van/pickup though?
Be careful about being self employed and only having one client - Google IR35.
^ that.
also you'll either be self employed or you'll set up a company, they are different approaches. i went self employed for a while, similar circumstances, though i had a range of customers, so no IR35 issues. if i were to do it again i'd go company just because of the flexibility, and i'd use an accountant. a good one will save you their fees.
where are you?
Yes it's one of the reasons so many people buy vehicles like the Mitsubishi HiLux. Counts as a van for tax purposes. One self employed guy I know got one brand new with an all inclusive servicing deal for £250 (?) a month. He is vat registered so extra savings too I believe.
Good luck
You can just work inside IR35. Though you'll be taxed like any employee but not receive employee benefits. I'd be demanding holidays and sick pay from the client then.
IR35 will definitely apply. I will be consulting with a company, but they will be my single client. I'm trying to find myself an accountant at the moment.
I figured that if needed, I could drive an L200 double cab, and I'm sure it would be fine as a car. However, I don't like the thought of trying to pull the wool over the tax man's eyes if I'm not really using the L200 to carry tools etc.
They are pretty nasty to drive (and park) and use a lot of fuel. Will the tax savings really be worth it?
I don't like the thought of trying to pull the wool over the tax man's eyes if I'm not really using the L200 to carry tools etc.
Look at all the L200s and similar on the road - they're built specifically for tax minimisation purposes - you can practically see the tax rules they're skirting drawn on the body work. They're certainly **** all use for carrying tools. 🙂
L200 ask the accountant. My mate has company branding on his and has a yacht maintainance business so can carry a few things about too.
With a van check the load capacity and number of seats. HMRC will challenge if not enough load capacity or too many seats and treat it as a car which means that you have restricted capital allowances and benefit in kind if limited.
Depreciation isn't an allowable expense instead you get capital allowances which are fixed by HMRC. As part of the capital allowances you also get an Annual Investment Allowance of £200k which you can claim 100% on plant and machinery that you own, not leased.
I assume you will be flying to most countries and not driving there for time and costs benefits. As such you may be better charging the company for you mileage in your own car which unless you drive something that guzzles fuel will more than cover your costs and is tax free. If you're VAT registered you may also claim the VAT back too.
If you don't really need a car for business, then just buy a decent s/h one and charge 45ppm whenever you drive for business.
[i]Be careful about being self employed and only having one client - Google IR35. [/i]
Yes, make sure your contract enables you to work with others and also substitute yourself.
+1 SJD, we've been with them +15 years.
+ 1 above, whilst starting off until you find your feet it might be simpler just to use HMRC guidelines and record 45ppm for business use on an existing or bought second hand vehicle if not needed that much.