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Should i stay PAYE or set up Limited Company??

  • 06-04-2008 10:42am
    #1
    ciaran1985
    Closed Accounts Posts: 2 ✭


    I am currently a PAYE worker and my company has given all the employees the choice to set up a limited company with the help of a corperate services company who came and explained what would be involved.basically they set it up for you,look after all the administration, invoicing, payroll, tax etc. and at the end of it all they say your salary can increase somewhere close to 30%, that is taking into account my present company is offering me a 12% rise if i switch.for this service they charge 4% of what you earn. Not really sure what to do and was wondering if anybody has done something similar to this and how it worked out for them,or if anybody knows what is the most important things to consider if i do decide to change or if it will be worth my while at all as im not really sure of all the in's and out's of it?? thanks


Comments

  • #2
    Jo King
    Banned (with Prison Access) Posts: 2,139 ✭✭✭Jo King


    A lot of the protections you have as an employee such as the right to claim for unfair dismissal will disappear. You will also no longer be covered by the Working Time directive. How will sickness be dealt with when you are self-employed? What about your pension? The contract you enter into with your employer will be renewed from time to time; how often? Your social welfare contributions will be at a modified rate. This may affect your entitlements to certain Social Welfare benefits in the future.The company you set up will be taxed and any salary you draw from it will also be taxed. Have you spoken to an independent accountant?


  • #3
    board om
    Closed Accounts Posts: 643 ✭✭✭board om


    everything in the above post wold be correct, but there are quite a few benefits as well. obviously you will have uncapped earnings so at least if you put in the extra effort you will see it pay off that bit more. also i presume you wil have more controls over the hours you work. there are quite a lot of tax reliefs you can avail of as well. like if you register your home as your office you will be able to write off things like home phone bill, broadband, electricity, mobile phone, etc against you tax. you may even be able to write off part of your rent / mortgage. you would have to look into that because i remember it used to be 1/3 of your rent / mortgae but that was a few eyars ago so i have no idea how much it is now.

    basically there are great benefits but alos there are some negatives. tbh you would have to get all the information and bring it to someone, maybe an accountant, that has no vested interest in the company and see what they think. they would be able to give advice based on the information you provide.


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