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Work PAYE part time and thinking about contracting

(8 Posts)
Jellybean81 Thu 23-Feb-17 12:41:27

I work three days a week in a specialist role and have been approached to do some consultancy on my remaining two days.

The extra money would be a huge help and allow me to keep the flexibility that comes from being a part timer. But I'm not sure how payment will work. My employer pays me via PAYE.

The potential consultancy client have offered PAYE or payment via a limited company. Which would be the best option to go for? Is setting up via a limited company expensive and time consuming?

Currently I'm in the lower tax band but the consultancy work would put me into the higher rate bracket.

JoJoSM2 Thu 23-Feb-17 16:04:06

Limited companies can be fiddly. Could you you become a sole trader? It wouldn't be time consuming. Obviously whatever you do, you'll need to pay the extra tax.

senua Thu 23-Feb-17 16:08:15

I recommend seeing an Accountant to go through all the nuances.

Are you professionally liable for your consultancy work? Would you get comfort by ringfencing that liability in a limited company?

londonloves Thu 23-Feb-17 16:15:54

Also if you are thinking about constructing work in the public sector, bear in mind the changes to IR35 coming in April which will make working through a limited company much less tax efficient, using an umbrella company is a better option.
Setting up a limited company is straightforward if you pay an accountant to do it for you!

Jellybean81 Thu 23-Feb-17 18:29:00

Thank you! I'm a specialist in a HR function (trying not to be too identifying) It looks like two lots of PAYE might be the best option for now. I've also recently started a hypnobirthing business which is set up as a sole trader but no sales yet. I'll need to do a tax return this year as things may get pretty complex!

Writing this all down perhaps it is best to take the leap and just go for incorporation.

nannynick Fri 24-Feb-17 06:21:31

Two PAYE jobs and sole trader sounds fine to me. See how it goes and if the HR consultancy role leads to expansion, such as you providing that to many different businesses, then look at limited company status (join a local business association and talk to people in business about what they did when expanding).

MirandaWest Fri 24-Feb-17 06:35:16

Will you be employed or not? Who will choose when you work, who will provide materials, could you send someone else instead of you etc?

Jellybean81 Fri 24-Feb-17 20:29:55

Thanks for all the responses - I've read a bit more about ir35 and it sounds like I would technically be an employee as I'd only be consulting for them and I'm not in a position to send someone else in my place. If I end up going down the PAYE route it's a good point regarding equipment etc but I guess I could ask for an allowance or something to cover this. My understand is that expenses would be capped at 5% but I guess that wouldn't be taxed

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