Umbrella companies & IT Contracting

B

bb savings

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Umbrella companies & IT Contracting

Hi,

I'm a full time employee working for an IT company and have been approached by another company (non-competitor) regarding contracting in my spare time ( i.e. 1- 1.5 days a week).

I would like to take up this 2nd position but find the whole area of taxation and setting up a company and doing my own accounts a little daunting.

I don't want my current job knowing but do want to keep everything above board and legal.

I have heard that umbrella companies can take over this maintenance for me so as to keep the Tax-man happy.

I was looking for some feedback on any recommended ones in the Dublin area and also on the general view of whether Umbrella companies are a good decision to go with?

The contract will be short term and on an ad-hoc basis, working some weeks more than others.

Any help is greatly appreciated.

Thanks, B.
 
My understanding is that the umbrella concept applies in the Uk but not in Ireland. Check out the Contracting Guide on www.osk.ie. You might also contact the Giant Group on 6620120 who prepare accounts for contract companies and ask them.

Please do post the results of your research

Brendan
 
similar position

Hi bb_savings, I'm in a similar position.

I think its straightforward enough - register as a self-employed sole trader, calculate your income tax due on the extra income, and pay this along with your self-employed PRSI (5%) plus health education and training levy.

Don't forget to deduct reasonable business related expenses from your reckoned income first before calculating your tax.

Good advice is to seek some form of professional help for this. Hopefully, I'll be able to do this once I visit my accountant. Perhaps you can post your update also?
 
Umbrella companies in Ireland

Hi,

after talking to a few recruitment agencies I came across a company called the 360 Group. They specialize in exactly what I was looking for.

Details can be found at:


Hope this helps others too.

Thanks.

Brian.
 
Re: Info

Hi bb

That looks like a very good site...

It's well laid out, but is the information of much use? The tax calculator seems to be based on the tax data for 2000/2001!

Let us know if you learn anything interesting from it.

BB
 
Hi bb_savings,
As suggested by previous posts, you might not need to bill your client through a company at all. In principle you can just take the payments, and declare the income, pay the tax.

Though your client may require that you are paid though a company (like a uk-style umbrella), to make it clear that you are not their employee and they are not responsible for your well-being etc.
They also might want you to be VAT-registered, although the tax-man does not require this unless your self-employment earnings are expected to reach a certain level.

A good tip on www.mcgibney.com is to open a new bank account for each venture. So as long as you get paid into that account, all will be clear and simple to everyone (specifically you and the tax-man).

(Note also! I am totally unqualified to give advice to anyone about anything, including tax matters. The above may be nonsense.)
 
Umbrella company - tax calculation

Hi BB,

was wondering if you could help me. I got your reply about the company using an old tax calculator.

I just received payment from them and got hammered by the taxman!

The Net amount after handling came to €2,525 and after deductions all I received was €1207, good day for the taxman!

I wasn't able to use my current tax credits because I'd have to inform my current employer to get them which I didn't want.

As a result I ended up paying:
Employers PRSI: €245
Employee PRSI: €115
Tax: €958 (ouch).

Do this sound reasonable to you?
If so, do you know if I'd receive anything back from the taxman at the end of the year, like maybe I'd get tax back or pay less tax for a month in Jan 2005 if the taxman realized I'd paid too much in 2004 for the credits I was given?

Thanks for your help.

BB.
 
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