Retiring

[Tommy_Catons_Perm]

I'd say use an umbrella company at first as a PAYE employee until you get established. If you are going to be a contractor or consultant for the long term then go Ltd company.

When I was unemployed years ago I managed to get a temporary contracting job and I used an umbrella company for a few months. I was in the process of switching to Ltd but then I was offered another permanent job so I resigned from the temporary contract / umbrella job and the Ltd company never started.

 

[Blue Mist]

A slight tangent for the retirement thread but I wanted to get a little advice. I retired from my job as an automotive account manager at the start of the first lockdown and I've been happy since, returning to golf, regular cycle rides and generally being free to do whatever I like with SWMBO. I was approached by my former customer earlier this year as they wanted me to consider joining their team, using the skills I developed while managing their EMEA account for my last employer... That opportunity hasn't totally materalised yet because they are working on internal re-structuring and currently there is no way they can accommodate me into the team... The approach was heart-warming and I felt like I could do another year or two if the money was right and then hang my boots up for good... It would have been working because I wanted to and not because I had to....

Fast forward to the end of last month and another old acquaintance calls me. The company he is working with to grown their automotive network in EMEA want somebody with a good working knowledge of automotive equipment and installations, the exact area I was involved with before I retired.... Long story short, I signed an NDA and I've since seen their equipment list / requirements and it's very similar to the equipment list for my last customer. I'm very confident that I could build a list of vendors or even partner with my last employer to deliver what this new company wants as it's the exact same field (but for a different manufacturer) as my last account.

The new company want me to deliver consultancy to them and have asked for a "fixed price quote" for this. I assume that this means I will offer consultancy but any essential travel etc. will come out of my hourly / day rate. I've got zero experience of consultancy so that's where I need guidance. How easy is it to set up as a self-employed consultant or is this unnecessary... I know I can help this company with my experience but I'm not sure I can be bothered with the whole setup company / self-employment scenario if that's what is needed....

Two things to consider.
If you are self employed the tax man states you have to have at least 3 different clients/customers. If you are registered as a company you don't.
As others have said it is very easy to set yourself up as a company.
You say one customer seems to be offering payment for services but not for hotels etc. The answer to that is fine, as long as you are happy with what they are offering. But it is no good being paid £200 per day if you are spending £100 on hotels etc.
Decide what you feel is correct renumeration for your skills, do not do it on the cheap. If they won't pay stay retired. Don't approach your old lot, do it yourself, you know what to do, have the confidence.
I did 7 years self employed consultant and then 4 doing the same but as a company.

 

[117 M34]

My company match pension contribution and I currently only pay in 4%. They will match up to 10% so I was going to up it to 7%.
This makes sense to do doesn't it? I'm not just better off investing the money myself?

 

[Citizen of Legoland]

HMRC were clamping down on IR35 before Covid appeared, they're losing a lot of revenue in tax and National Insurance.

IR35 changes were done in two stages. Public sector a few years ago and private sector in April. Wasn't "clamping down", just setting up an easier system.

 

[Citizen of Legoland]

My company match pension contribution and I currently only pay in 4%. They will match up to 10% so I was going to up it to 7%.
This makes sense to do doesn't it? I'm not just better off investing the money myself?

Almost certainly you should pay upto what your employer will pay. I'd go 10% if you can afford it because most seem to pay less, so if you move on you've lost the chance.

 

[denislawsbackheel]

My company match pension contribution and I currently only pay in 4%. They will match up to 10% so I was going to up it to 7%.
This makes sense to do doesn't it? I'm not just better off investing the money myself?

Yes
Yes
Yes
The full 10%

 

[BerkshireBlue]

My company match pension contribution and I currently only pay in 4%. They will match up to 10% so I was going to up it to 7%.
This makes sense to do doesn't it? I'm not just better off investing the money myself?

why miss out on double your money, match that 10%

 

[hammocity]

IR35 changes were done in two stages. Public sector a few years ago and private sector in April. Wasn't "clamping down", just setting up an easier system.

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[ChicagoBlue]

I'm never going to have the liquidity some on here have but I'll be able to fully retire in 18 months, play golf, have a couple of holidays and a couple of nights out per week plus going to City of course.

Reminds me of the old story about the business consultant & fisherman!

 

[ChicagoBlue]

My company match pension contribution and I currently only pay in 4%. They will match up to 10% so I was going to up it to 7%.
This makes sense to do doesn't it? I'm not just better off investing the money myself?

Free money…not sure how many people I know who like to give up that, but to each their own.

If you can afford to make it 10%, that’d be 20% of your cheque going into your investable future.

More is better in this case.

 

[Bluesince1979]

Then there’s the issue of tenants that refuse to pay rent. My folks got hit with that, the tenant was the eldest child of a close friend, she was a mother and worked as a nurse (so respectable one would imagine) but she stopped paying rent and it took 9 months to get her out through the courts and when they did, she’d trashed the place in his last week and they had to spend £20k on a new kitchen, bathroom and redecorating. They took her to county court for that and managed to get a court order saying she’d pay back £50 per month as it was all she could afford.

The stress of that aged my Dad very badly and wiped out much of their savings.

I’m a big fan of BTL’s, but as with anything, one can be hugely unlucky.

Ive a little pot and was on the verge of going down BTL route. Had a sit down with a pal who owns close on 100 houses.
His words ..”you can end up buying yourself a huge headache” and repeated MANY stories like yours.
bugger that.
So ive an appointment with a financial adviser next week

 

[Citizen of Legoland]

Redirect Notice

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I know what it is, I've been through both the old and new determination processes. I just don't agree with the arguable description. It also created a problem in the public sector because high quality, affordable staff became harder to find, so it wasn't that great an idea for employers. However, for some contractors, it was great because rates have gone up and the risk has gone down. So, going back to the recent query, I wouldn't be worried about going to an ltd if the work fits that.

 

[forevermancity]

Between me and my partner we can save between £1100-£1500 p/m (depending on commission) Mortgage paid off so the money just goes into 2 bank accounts, 1 being vanguard 60/40 (thanks to the advise/tips on another thread)

Seems like yesterday when I was dicking about in my early 20’s so I’m assuming retirement will approach quicker than I want it to also.

Any tips/advise to give? Got a small pension pot of £5k ish so far, put money into that or have pensions become more unstable over the last 18 months?

 

[hammocity]

I know what it is, I've been through both the old and new determination processes. I just don't agree with the arguable description. It also created a problem in the public sector because high quality, affordable staff became harder to find, so it wasn't that great an idea for employers. However, for some contractors, it was great because rates have gone up and the risk has gone down. So, going back to the recent query, I wouldn't be worried about going to an ltd if the work fits that.

I was just replying to your post where you said they just made IR35 easier to implement. My sister works for an IFA (GJS in Stalybridge) and I know Greg who owns it, he was telling me about the targeting of contractors (mostly blue collar) about 3 years ago. One of my other friends runs a construction company (Indigo Forecourts) and employs a lot of contractors, all their wages have a tax deduction at source. I'm only quoting 2 people who have expertise in their field.

 

[Citizen of Legoland]

Between me and my partner we can save between £1100-£1500 p/m (depending on commission) Mortgage paid off so the money just goes into 2 bank accounts, 1 being vanguard 60/40 (thanks to the advise/tips on another thread)

Seems like yesterday when I was dicking about in my early 20’s so I’m assuming retirement will approach quicker than I want it to also.

Any tips/advise to give? Got a small pension pot of £5k ish so far, put money into that or have pensions become more unstable over the last 18 months?

My pensions dropped a lot and then recovered a lot, plus some. So, yes, that's the definition of unstable but you can't judge it as so with pensions which are designed for long term investing. Just make sure your attitude to risk is matched by your choice of investments. I did notice that my managed pot fell a lot less than my unmanaged pot, which is expected. However the unmanaged recovered more so cancelled it out.

 

[flook]

You are not supposed to set up a company and work self employed if you only have one Customer, info here:

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not strictly true, the key (as it has always been) is not to be part and parcel of your one customers business,so work from home, work your own hours, dont go on corporate jollies, havea right of substitution of labour etc, the detail is all in the contract.

If you are contractually aware then you might be able to cope on your own with that, but I'd recommend having a review by a specialist, try IPSE, membership is reasonable, they have template contracts and offer a review service and legal protection depending upon the level of membership

 

[SWP's back]

Between me and my partner we can save between £1100-£1500 p/m (depending on commission) Mortgage paid off so the money just goes into 2 bank accounts, 1 being vanguard 60/40 (thanks to the advise/tips on another thread)

Seems like yesterday when I was dicking about in my early 20’s so I’m assuming retirement will approach quicker than I want it to also.

Any tips/advise to give? Got a small pension pot of £5k ish so far, put money into that or have pensions become more unstable over the last 18 months?

A pension is just an investment with tax advantages bud. It’s as unstable or stable as the underlying portfolio.

 

[Citizen of Legoland]

I was just replying to your post where you said they just made IR35 easier to implement. My sister works for an IFA (GJS in Stalybridge) and I know Greg who owns it, he was telling me about the targeting of contractors (mostly blue collar) about 3 years ago. One of my other friends runs a construction company (Indigo Forecourts) and employs a lot of contractors, all their wages have a tax deduction at source. I'm only quoting 2 people who have expertise in their field.

What IR35 was initially set up to do in 1999 was stop people setting themselves up as PSCs and enjoying lower tax rates. Unfortunately they left the employers out of the process and that meant an industry grew up whereby contractors just followed what others were doing. Some employers were aware of this and just telling contractors to do this so they could avoid their tax obligations, plus it made their pay rates more competitive. HMRC found it very difficult to find anyone guilty of purposely evading tax so have changed it so that the responsibility falls on the employer at one end of the chain (usually employer > agency > contractor).

The cracking down was technically on their own processes rather than on the contractors. The issue of tax evasion by contractors has not changed, it can still be done in the same way.

 

[hammocity]

not strictly true, the key (as it has always been) is not to be part and parcel of your one customers business,so work from home, work your own hours, dont go on corporate jollies, havea right of substitution of labour etc, the detail is all in the contract.

If you are contractually aware then you might be able to cope on your own with that, but I'd recommend having a review by a specialist, try IPSE, membership is reasonable, they have template contracts and offer a review service and legal protection depending upon the level of membership

It's not me, I already have a small limited company with several customers, one of whom is a poster on BM.

 

[flook]

I was just replying to your post where you said they just made IR35 easier to implement. My sister works for an IFA (GJS in Stalybridge) and I know Greg who owns it, he was telling me about the targeting of contractors (mostly blue collar) about 3 years ago. One of my other friends runs a construction company (Indigo Forecourts) and employs a lot of contractors, all their wages have a tax deduction at source. I'm only quoting 2 people who have expertise in their field.

blue collar workers are rarely ltd co directors, different scheme. Taxman has been trying to clamp down on PSC's since 2000 when IR35 was initially introduced, initially with dubious legal determinations which were often challenged in court. I believe the IR win rate in the early years was around 2% the legislation was that flawed.

Obviously things have tightened up in recent years, with the change in onus with regards determination of employment status shifting from the PSC to the client, as Legoland says, in 2 stages.

This system again is dubious process, with a number of large "employers" using a blanket determination inside IR35 for their contractors as that is their "safe" position. These determinations will, I imagine, be challenged at some point by the likes of IPSE, although since the change from PCG to their current position, I've found them to be less influential.

I used to be very interested in IR35 as that legislation was the biggest threat to my familys way of life. Over the years I've moved myself firmly out of the firing line (multiple clients, home working, own hours etc) so my interest has waned, so what I'm saying may be slightly out of date/off.

As always, do your own research