| |
To ensure we maintain the highest standards of customer service, our operators have documented the most commonly asked questions from new contractors prior to joining our Redego Umbrella or Redego PSC service. For your convenience, we have created a list of these FAQs and also provided a detailed (but easy to understand) explanation which we hope will fully answer your query(s). Just click on the relevant question below and you will be directly to our response.
What service do you provide?
We provide specialist Limited Company accountancy services to freelance contractors. Initially acting as Company Formation Agents, we have 1,000s of ready-made Limited Companies available ‘off the shelf’ right now. All of our Limited Companies are already registered for VAT and have a Limited Company bank account with Barclays Bank. This means that as soon as you land a new contract, you immediately have the ability to invoice the recruitment agency or end client through a Limited Company and not therefore suffer the Tax and National Insurance consequences of being a PAYE employee.
Once signed up, you have the option of working under our Redego Umbrella service where your payments will be made on an ‘Inside IR35’ basis with certain expenses reclaimable. Alternatively, our Redego PSC service may be a valid option for longer-term professional contractors, where you can work either ‘Inside IR35’ or ‘Outside IR35’ depending on the nature of your working relationship with the end client. Redego PSC and
Redego Umbrella contractors can claim home to work business expenses where legitimately incurred when performing your duties at a temporary workplace.
In most cases, you will take home between 5 – 20% more income working through one of our Limited Companies compared to being a PAYE employee of the recruitment agency or end client. Additionally, you will also benefit from free Public & Employer's Liability Insurance, free Professional Indemnity Insurance, access to a Stakeholder Pension and tax efficient Child Care Vouchers (Redego Umbrella contractors only).
How much does it cost?
For Redego PSC contractors, we charge a one-off fee of £50 + VAT to create your Limited Company. This is the charge levied by Companies House and associated legal fees with no cost for the setup administration at our end. It also includes the cost of VAT registration and opening a Limited Company bank account with Barclays. There is no setup or joining fee for Redego Umbrella contractors.
Once your Limited Company is fully operational, we charge £25 per week (£12.99 per week after tax) for our Redego Umbrella service and £35 + VAT per week for our Redego PSC service. These fees are fixed regardless of the amount invoiced to the recruitment agency or end client. Additionally, we don’t charge you when you’re not working, on holiday or between contracts. If you don’t get paid, we don’t get paid.
What does it include?
The Limited Company accountancy fee covers the following for both Redego Umbrella and Redego PSC:
- Same day CHAPS payments
- Free Public & Employers Liability Insurance
- Invoicing service on receipt of signed timesheet
- Processing of weekly / monthly expenses
- Processing of weekly / monthly payroll, PDF Payslip and SMS Text Message
- Debt collection of outstanding payments from agencies and end clients
- Limited Company Quarterly VAT Returns to HMRC
- Limited Company Annual Tax Return to HMRC
- Limited Company Annual Statutory Accounts to HMRC and Companies House
- Limited Company Annual Return to Companies House
- Limited Company Annual P35 to HMRC
- Production of Year End P60 and P11D
- Registered Offices
- Secretarial Service (we act as the Secretary of your Limited Company)
- Discounted Financial Services such as life insurance and mortgages
- Data Protection and Management
Specific services covered under Redego Umbrella include:
Specific services covered under Redego PSC include:
In addition to the above, our admin fee for both services also covers our Customer Service support team, available to take your calls between 8am and 6pm Monday to Friday.
What's the difference between a Redego Umbrella and a Redego PSC ?
Redego Umbrella has been specifically designed for freelance contractors working through a recruitment agency. It provides our clients with a flavor of working through a Limited Company without the responsibility or risk of acting as Director, managing the business bank account and receiving dividends (IR35 and MSC contentious). As you will not be in full control of the Limited Company, your take home pay will be less than what it would under Redego PSC but still up to 10% more than being a PAYE employee of the agency or end client. In addition, you will also benefit from free Professional Indemnity Insurance as well as access to an optional Stakeholder Pension Scheme and tax efficient Child Care Vouchers. Redego Umbrella is defined as our ‘Umbrella Company' Solution.
Redego PSC is available only to contractors that wish to grow and develop their own business and therefore take full responsibility for managing it from the outset. You will be assigned as sole director and have exclusive control over company finances. You will also be tasked with signing all services contracts between your Limited Company and the agency or end client. Our service to Redego PSC contractors will be similar to that of high street accountants, being an outsourced service for payroll, accounts, tax returns, company administration and compliance. We will keep you informed of your legal responsibilities and tell you how much you can pay yourself each week. Redego PSC is defined as our ‘Personal Service Company' Solution.
What makes Redego different from other Accountants?
At Redego, we like to be a little different. Unlike most of our competitors (and literally all high street accountants), we won’t bombard you with complicated facts and figures, most of which you don’t need to know let alone understand. Our business model is based on simplicity – keeping things simple when dealing with our suppliers, our own internal staff and above all you, our valued customers.
Our fixed weekly charge is the lowest on the market – guaranteed. We maintain a professional ‘one on one’ relationship with all our contractors so you get to know us on a more informal basis.
How long
will it take to join and what do I have to do?
By continually improving our own internal processes, we are now able to create your Limited Company in just 5 hours. Redego Umbrella contractors are usually setup in just 5 minutes.
To join, simply download either our Redego Umbrella Membership Application Form or our Redego PSC Membership Application Form. Work through the easy to follow instructions and return the relevant form to us (signed), along with proof of your ID. Once we've received the information in full, your Limited Company will be setup and our straightforward Welcome Pack sent to you in the post. It's really that easy!
How and when
do I get paid?
We leave the frequency of your pay entirely up to you. Most of our contractors are paid weekly, but you can elect to be paid fortnightly or monthly, it's simply your decision.
Once the end client or agency makes payment to us;
For Redego Umbrella contractors, we calculate and transfer (via CHAPS) the net amount to your own personal bank account and hold the remainder in our account to settle your Limited Comanies' tax bill directly with HMRC.
For Redego PSC contractors, once the agency or end client had transferred the gross amount to your Limited Company bank account, we will tell you the net amount you can then transfer to your own personal bank account. The remainder must remain in your Limited Company bank account to settle your tax bill directly with HMRC as advised by us throughout the year.
For both our accountancy services, you will be issued with a PDF payslip and SMS text message on the day of payment.
How about Holiday
pay?
At Redego Accountants, we ensure that by working through your Limited Company you not only earn money in the most tax efficient manner possible, but crucially, you comply with the wide and varied requirements of UK Employment Law.
Regulations in the UK mean that all employees are currently entitled to a minimum of 24 days paid holiday per annum. At Redego we calculate and deduct an hourly holiday rate and include this amount on your weekly / monthly payslip. Should you wish to take holiday later in the year, this money can be requested from Redego and used to fund your expenses when you’re not working.
Why are expenses
so important?
As a freelance contractor working through a Limited Company, you are legally allowed to deduct expenses incurred in the performance of your duties, provided of course that they are ‘wholly and exclusively’ related to your job. Such expenses must also have been incurred whilst at a temporary workplace. For Redego Umbrella contractors, the expenses are repaid to you free of Tax and National Insurance with the balance payable as PAYE salary.
For Redego PSC contractors, claiming expenses will effectively reduce the amount payable in Corporation Tax with dividends being paid out of whatever’s left over. In a nutshell, reduce your Corporation Tax bill by reclaiming expenses and get paid more in Dividends.
How do I submit
expenses?
At the end of each week or month, we ask you to fill out our easy to follow Expense Claim Forms (we’ve even created a useful guide for completing them). Both forms can be downloaded from our Member’s Area as well as being sent directly to you within your Redego Welcome Pack.
Once we have received a completed (and signed) copy of your Expense Claim Form with original receipts (photocopies & faxes are not acceptable), we create an electronic file of your expenses and ensure they are repaid to you at the next payroll.
Do I have
insurance cover?
(1) Public and Employers' Liability Insurance
(2) Director's & Officers Insurance
(3) Personal Accident Insurance
(4) Professional Indemnity Insurance
Being an employee of your Limited Company (regardless of whether you work under Redego Umbrella or Redego PSC), you will automatically be covered by (1) Public and Employers' Liability Insurance – the cost of which has been included for you free of charge by Redego Accountants. For Redego PSC contractors, as you will be acting as the Director of your Limited Company, we also provide Director's & Officer's Insurance free of charge.
In addition to the above, we have arranged a very comprehensive (2) Personal Accident Insurance cover. With this policy in place, you are protected against workplace accidents including commuting to and from your current place of work as well as accidental death up to £100,000 and up to £40,000 worth of hospital costs. Personal Accident Insurance is available to Redego PSC and Redego Umbrella members for a small weekly fee of just £2.50.
Finally, we can also provide (3) Professional Indemnity Insurance cover for a weekly charge of £3.50 to Redego PSC members (this insurance is free to Redego Umbrella contractors). As a freelance contractor in business on your own account, you will be covered against the legal costs and compensation claims sought by a client if you have made mistakes or are found to have been negligent. If you are in business of selling your knowledge or skills, we strongly recommend you take out this policy.
For more information on the above products, please feel free to contact our Customer Services Team who will be able to advise you of the most appropriate level of insurance applicable to your individual circumstances. All prices listed above are inclusive of Insurance Premium Tax.
What
will be my employment status?
You will be an employee of your Limited Company and therefore have full-employment status just like any permanent employee or contract worker on PAYE. You will receive a monthly or weekly payslip and SMS message, a P60 and a P11D at the end of the tax year. Redego PSC contractors will also receive a year end Dividend Voucher. |
|
What are
the terms of my employment?
The terms of your employment will be issued to you in your Redego Welcome Pack. Don’t worry, there’s nothing complicated here. Just a simple, easy to follow contract between you (the Temporary Worker) and your Limited Company.
Please take the time to read through the document, sign it and return to us so we can formally complete your records at our end.
Do I have
to find my own work?
Yes, although you are free to contact any recruitment agency on the high street. As soon as you’ve been placed in a temporary contract, you will need to inform us ASAP so we can begin to prepare the necessary invoicing arrangements between your Limited Company and the agency / end client.
You may find work directly with the end client through your own internal contacts. By working through a Redego PSC or Redego Umbrella, you are also able to work for two or more agencies at the same time if you choose. Additionally, Redego Accountants do not charge if you change agencies. Provided your timesheet is signed and your invoice(s) paid by the agency / end client on time, we are happy to process the payroll and issue you with a payslip and SMS text message.
What responsibilities/rights
do I have as 100% Shareholder of my PSC?
Your Redego PSC will be formed with just 1 authorised share available for distribution (you will be the holder of this single share).
Your rights are listed within the Memorandum and Articles of Association submitted to Companies House when we create your Limited Company (you will be sent a copy of both forms upon request). Unless we contact you otherwise, there is nothing else required by you other than those items listed within our Redego PSC Terms & Conditions.
Redego PSC contractors will need to be aware of their responsibilities acting as Director of their Limited Company. More information can be downloaded here or by calling Companies House on 0870 3333 636.
Will I need
to submit a personal tax return?
There may be a requirement for you to complete a Self Assessment Tax Return each year although the payroll information provided by Redego Accountants (weekly / monthly payslips and year end documents P60, P11D and your Dividend Statement for Redego PSC contractors) is all you need to declare your total income to HMRC.
In general, if your gross income is in excess of £40,000 per annum and you haven’t already received a Self Assessment Tax Return, it is within your interests to contact HMRC and request one.
If you would like us to complete and submit your Self Assessment Tax Return, please notify our Customer Service Team who will make a note on your account and send out an easy to follow checklist. This service is provided in addition to our standard Redego PSC and Redego Umbrella and costs just £100 + VAT. Those Redego clients who have income outside that generated through their Limited Company are not able to apply for this additional service. What is IR35 and
how does it affect me?
IR35 is piece of legislation introduced by the Government for the 2000 / 2001 tax year. In essence, what it says is that if you are really a deemed employee of the agency/end client (in practice) then merely inserting a Limited Company between the two parties (you – agency/end client) does not stop you suffering the PAYE Tax and National Insurance effects of an employee. IR35 is only relevant to Redego PSC contractors and does not effect those working under our Redego Umbrella service.
The question ‘are you really an employee? (of the agency/end client)’ depends on a number of factors. Generally, contract workers who:-
• Are responsible for their own technical training and updating,
• Provide deliverables to an agreed standard (& correct work not satisfactory to the client),
• Are not part of the end client’s organisation (& do not benefit from the companies normal benefits),
• Provide their own equipment (laptop, mobile, work tools),
• Take up our Professional Indemnity Insurance (as well as our free Public and Employers' Liability Insurance)
are genuinely Self Employed and do not fall foul of IR35. If this represents the terms of your current engagement(s), then you are entitled to enjoy the full tax benefits of working through Redego PSC ‘Outside IR35’ (in this case, your weekly/monthly payment will consist of a Salary, Expenses and Dividends).
However, if you can be regarded as an employee of your client, although you will still qualify for Redego Accountants to administer your payroll through a Redego PSC ‘Inside IR35’, your weekly/monthly payment will consist of a Salary and Expenses. The decision as to whether you work Outside IR35 (Salary, Expenses and Dividends) or Inside IR35 (Salary and Expenses) will directly affect your net take home pay. In both cases you will still however take home between 10–20% more income than if you were a direct PAYE employee or either the recruitment agency or end client.
If you believe you may be affected by IR35, please feel free to contact our Customer Services team who will be happy to answer any questions or concerns you may have. Once again, we will keep things as simple as possible….promise.
|
|
