Further Information

SHAREHOLDINGS

You will receive all of the shares issued in the company. There is usually only one. They cost £1 each and this will be deducted from your first income into the company. When you leave the company and it is closed this will be refunded to you. There is a clause in the contract preventing your shares being traded.

DIRECTORS AND COMPANY SECRETARY

We will be directors and the company secretary of the company handling all accounting, administration and compliance for the company. As you are an employee we will issue you with a contract of employment.

INSURANCE

We will effect Employers liability and Public liability insurance. These are required by law and the cost will be deducted from your income. You will have a choice of whether Professional Indemnity Insurance is taken out. We are unaware of any PII claims on Contractors but in this litigious world you may prefer to have this cover. We arrange this if required.

VAT

The company will be registered for VAT.

IR35

We will organise a review of your contract to determine if you are liable to IR35. If you are, the level of your salary will be determined for you after deducting allowable expenses under the legislation. However, many contractors should be able to avoid IR35 and, if so, you will be able to determine
your own salary and dividends. We will give you every assistance to avoid IR35 and can re-negotiate the terms of the contract if it initially fails. We have to make sure that the decision of whether you are caught or not, is correct, otherwise you could have a substantial and unplanned tax liability. We need to protect you from this possibility. The cost of the IR35 review will be bourne by the company. Fortunately, it is insignificant compared with the potential tax savings of avoiding IR35.

We insist that any new contract or revisions or extensions of contracts are subject to an IR35 review in order to protect you.

SALARY

You will decide on the level of salary to choose and we will help you with this. Pension payments are based on salary received so if you have a low salary this may affect the amount of Pension Contributions, which you can make. The company's Independent Financial Advisor will help with this.

EXPENSES

Please see the separate article on tax-deductible expenses. You will be paid all properly incurred and documented tax-deductible expenses with your salary without any deductions for PAYE or National Insurance. A full and detailed explanation of monies received and paid will be issued with each salary cheque.

DIVIDENDS

After deducting from the company's income, your expenses, salary, employers National Insurance, our charges and any other costs, there will be a balance of profit left. After allowing for any Corporation Tax, the remainder will be available for dividend payments. It does not have to be taken all at once and sometimes there can be good tax planning reasons for not doing so. Dividends can be paid as often as you like up to the available post tax profit.

TAX

PAYE and National Insurance deducted from your salary will be paid over to the Inland Revenue on a quarterly basis. We will handle this and all of the forms and returns e.g. P60, P35, P11D, etc on the company's behalf. The corporation tax will be calculated when the accounts are prepared and will be paid over at this time. As the year progresses, we will have put aside sufficient funds to pay the Corporation Tax.

Higher rate taxes are deducted at source from your salary if on its own it breaches the higher rate threshold. There is no method for deducting higher rate taxes from your other income including dividends. When you receive dividends they will be treated as if basic rate tax is paid. We will advise you when your income from the company exceeds the higher rate threshold and will give you an estimate of how much higher rate taxes are due to be paid for the current tax year. The actual liability will only be known when your Self-Assessment Income Tax Return is prepared. We can do this for you. We can also put this money aside for you in a separate bank account to ensure that it is available when the time comes to pay it.

ANNUAL ACCOUNTS

After the end of the Company's financial year, we will prepare the annual accounts and Corporation Tax computations. If there are any available funds undistributed at this time we will advise you. You will then have the option of whether to issue a further dividend.

COMPLIANCE

We will undertake all compliance matters on behalf of the company. This includes the filing of all returns for the Inland Revenue, HM Customs and Excise and Companies House. We will free you to do what you do best - earning the profits.

AGENCY/CLIENT CONTRACT

You will be responsible for finding a contract and agreeing the terms with the agency/client. We will sign this contract on behalf of the company. You are committed to complying with the terms of the contract. We have no obligations in respect of this contract and you must indemnify us in this regard. This contract takes precedence over the contract you sign with us.

ADMINISTRATION SERVICES AGREEMENT

This is the agreement between your company and Lowson Ward to provide the services set out in the schedules to the agreement. This is also the company’s agreement to our charges. As directors, we sign this on your behalf and supply you with a copy.

TERMINATION/CONTRACT BREAKS

When your contract finishes you have a number of options.

You may:

1. Agree an extension or undertake a new assignment for the same company.
2. Sign a contract with a new agency/client.
3. Take a temporary break from contracting or
4. Leave contracting.

In the case of 1 and 2, you can continue through the same company and operate as before. If you leave contracting, we will ask you to resign as a director and sell back your shares to the company at £1 each, the price you paid for them. If you take a break, we will keep the company available to you for a period for three months or longer if necessary.