demigrate

Hi,

My wife has just secured an IT contract in Brisbane. What are the best options i.e. Manangement/Umbrella Companies, own limited company with acccountant, etc? Since she will only work for one client the 80/20 rule is probably an issue. Can anyone recommend any Management/Umbrella companies and what are their fees? What expenses can you legally claim eg relocation costs, work travel?

Going through the ATO website is a nightmare!!!!

Thanks

Darren

Centurion

From what I recall the benefits of setting up a limited company in the UK are to pay corporation tax levels rather than income tax levels via dividend. Unfortunately in Australia the tax rates are basically the same as personal levels anyway.

Having recently set up a company I decided that I would be a sole trader rather than form an actual company. The reasons were partly tax related and partly motivated by the fact that I woldnt then be bothered by superannuation rules, workcover and all other sorts of employee problems even though its a company with one employee...

Thats something I would have not done in the UK but its worked for my business needs. Perhaps you should seek from professional accountant advice as to the best model to use and which would be more tax effecient.

Back2Oz

Check out CxC www.cxc.com.au the have offices in Uk and Ireland, good setup

demigrate

Thanks for your replies guys.

From what I can see the rates are between 3 and 7 % (damn ridiculous if you ask me) from Contract Management companies whereas it's around 1 % in the UK from umbrella companies (dependent on the day rate, usually a fixed weekly fee). What are these contract management companies doing for the money?

Does anybody have the details of a decent Accountant, ideally in Brisbane who understands the tax implications on IT contractors?

Thanks

Darren

ykx1426

I looked into this when I first moved to Oz about 6 months ago. Basically, as people have said having a plc and being a one man band and working for the one client ...you are essentially a pseudo employee for tax purposes - which is bad if used to contracting elsewhere.

I contracted at home and would not touch an umbrella company as - they do VERY little extra on top of what a good accountant would do for you. I had a friend with cxc and I had an accountant before and difference in what we claimed for was considerable (in my favour!)

So in short - I would search hi and lo for a good accountant in Brisbane to chat to before going any further!!

demigrate

Hi,

I'm very quickly coming to the same conclusion about Umbrella companies in Oz. But I guess the million dollar question is - does anybody know a good accountant in Brisbane???? or anywhere in Oz??

Darren

worzel

I have found that some companies will insist you go through an agency like Hays or Manpower.

I have also been told that you can set up a "family trust" to trade through as a recommended option for tax benefits.

I am contracting for the second time at the moment but as I am expecting to be taken on again shortly I decided it was too much hassle, not worth paying for.

datamile

I'd be interested too.. Been contracting for 14 years in the Uk, hitting Brisbane in June.

Paul and Chloe

I contract through a family trust, however this does not get around the PSI regulations but was cheaper to set up ($500). The only financial benefit is that any income made by the trust can be paid to your other family members, by this I mean income on your contracting earnings be that interest or any investment purchased by the trust.

Cheers

Paul

Patrick D

Contact Entity Solutions in Brisbane. Sorry don't have the no.

demigrate

Thanks for the link.

However, we have decided it is in our best interest to go the way of an accountant and not contract management companies (too expensive if on a high rate).

Darren

c.shinkwin

If using a Management Company that allows you to operate as a "Sole Trader", can anyone tell me what would stop the individual from going direct to the Client once the first contract has expired.

In previous times your had a direct contract with the Agency who stipulated that you could not work for the Client for say six months after the termination of the agreement. Because you are now signing contracts with the Management Company (and not with the Agency or Client) what could stop you from going direct once the first contract has expired?

Many thanks in advance

hoofie2002

From looking at one of my contracts, it states that YOU as an entity cannot then ditch the agency after six months and work direct. It doesn't matter if there is a management company in the way, the contract has three parties in it instead of two. Whether its enforceable is a moot point, but you really don't want to find out as the agency WILL try to enforce it via their lawyers. And they WILL find out about... Also remember that many large companies will only employ via an agency [or sometime via a contractor owned management company where a group of contractors band together].

I work through CXC mainly so I can get some tax deducations and can contribute extra to my super via sacrificing. Whether I will continue with this depends on how good a job they do of my tax this year.