Contact with Daily rate & mileage

yop

Guys,
In for a contract role 250 per day as the perm job I am in looks doomed.

I am neither registered as company or a sole trader.

The issue here is the drive, its 1.5+ hours each way and will total 37,000 miles for the 12 month contract.
From what I understand I can claimed mileage or diesel expenses or something, but I am not sure if I have to be a company to do this.

Also can I purchase a company car/van and put this down as expenses?

Also any benefit of been a sole trader over a company for a 12 month contract, there is a good chance of a 1 year extension though, thats if i can survive the drive!!!!!!!

HashSlinging

Hi Yop,

You can work under a umbrella company, I use CXC.

I find them very good, they will manage you as an employee, looking after prsi, tax etc, so no returns headaches! as IMO for a 12 month contract theres not much point going limited or a sole trader. Only issue is you have to pay employers PRSI and your own.

Cant answer about the benefits of going limited for 12 months, but as a director you do not pay the employers PRSI, and can claim for more things. Depends on your situation I've been a contractor for 5 years and find it less of a headache (with small family + long commutes, study etc) to pay the extra for peace of mind.

I tried the limited route and it was a bit of a nightmare, but I wasn't very business savvy back then.

P.S. my current commute is 1.5 hrs and its not that bad, just have loads of access to good music, and a couple of audio books! currently learning Spanish in the car..

Tuvok

What would CXC charge typically per year? Would it be much extra over the costs of setting up a company?

Eoin

You should talk to accountant, but I am pretty sure you can expense the diesel. "Mileage" is really for employees, not sole traders.

The benefit of being a sole trader is less paperwork.

Stheno

Afaik as a contractor, you cannot expense any milage expenses that are necessary to get to your "usual" place of work, which in this instance would be your client if you were there more or less fulltime.

Most agencies and companies prefer to deal with people who are under a limited company/umbrella company arrangement as it deals with limited liability and you are less likely to make a case that you have potential equal rights as an employee of the company you are contracting with than you would as a sole trader.

You can use the various agencies (CXC etc) to either get set up as a director of a limited company or as an employee of a company.

There are advantages and disadvantages to both, the main one as an employee being that employers PRSI comes out of your gross, and the main one as a director is that you pay self - employed PRSI which long term affects your rights to PRSI related benefits.

As regards what the likes of CXC charge, it's usually 5% up to a maximum of €300 per month so you'd need to earn more than €6000 per month (or €300 per day given a 20 day working month) before you'd stop paying the 5%.

The 5% is tax deductible as are a whole list of other expenses, but milage such as you describe afaik is not.

yop

Thanks lads,
The biggest issues with this contract is the distance, if I am putting in 37k miles a year then the cost of diesel and wear and tear on the car will mean the "take-home" will be low once all these are taken into consideration.

I had thought as a company I could claim mileage/diesel but that now doesnt look the case.

Eoin

Speak to an accountant. I'd be very surprised if you couldn't offset more than an normal employee could. Perhaps a commercial vehicle would be an option, but get some professional advice.

yop

eoin wrote: »

Speak to an accountant. I'd be very surprised if you couldn't offset more than an normal employee could. Perhaps a commercial vehicle would be an option, but get some professional advice.

I know what you are saying Eoin. It is probably best thing to do.

mazza

nouggatti wrote: »

Afaik as a contractor, you cannot expense any milage expenses that are necessary to get to your "usual" place of work, which in this instance would be your client if you were there more or less fulltime.

+1

This was the advice I was given by my accountant.

I'm in a similar boat and the "usual" place of work rule applies, even if you are not employed by the company you are travelling to work for. I argued this with the accountant saying it wasn't my registered company office or place of work, but the rules are strict on this one/

That said, the number of guys contracting who I used to see claim lunch, milage to regular place of work etc was unreal and wouldn't stand up to a Revenue audit. Better safe than sorry...

That said, I'd check this with your accountant.

HashSlinging

It might be cheaper to get digs in the area from Monday night to Thursday night.

Eoin

mazza wrote: »

I'm in a similar boat and the "usual" place of work rule applies, even if you are not employed by the company you are travelling to work for. I argued this with the accountant saying it wasn't my registered company office or place of work, but the rules are strict on this one

I guess that's somewhat understandable, but I wonder if getting a small commercial van could be more cost efficient?

Definitely worth talking to an accountant about, and I'm sure there's loads of people available in the services available section of adverts.ie