Is it still beneficial to work through a limited company?

 

Despite the introduction of the IR35 regulations, working as a Limited Company is still an effective way for most contractors to work. For many contractors, operating as a Limited Company will reduce the amount of tax they are required to pay, and also offers the following benefits:

  • You are your own boss and retain control over your business
  • You can expect to take home up to twice as much pay as you would if you were subject to PAYE
  • You benefit from a 5% tax-free allowance because running a Limited Company entails overheads
  • You can offset expenses incurred in the course of your work against your taxable income

 

Expenses that you can claim for under Schedule E, provided you incurred the expenses wholly, necessarily and exclusively in order to fulfill your contract include:

  • Travel expenses (provided you do not work at the site for more than 24 months)
  • Pension contributions
  • Subscriptions to organizations and publications relevant to your work
  • Professional Indemnity Insurance
  • Meals and accommodation you consumed while travelling on business or working away from home
  • Internet usage
  • Mobile phone requirements
  • Postage and Stationery
  • Incidental personal expenses such as newspapers you may have bought while working away from home
  • Finally, if you work from your own home and can demonstrate that you incur some expenses specifically in the course of your work, you can claim a proportion of the cost of council tax, utilities bills

 

 

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