Category B - Perm to Contract Query

[Not a ghost]

Hi all, would be great if you could shed some light in my current situation.

I recently got out of my perm employment (annual salary 40,000) and went into contracting. The initial contract that I have is only for 3 months, which brings the total to over 16500 which hasn't reached the 18600 threshold.

In this circumstance, can I apply via Cat B which I can prove for the past 12 months my earnings were well above the requirement?

Many thanks for your help.

[Wanderer]

Hi all, would be great if you could shed some light in my current situation.

I recently got out of my perm employment (annual salary 40,000) and went into contracting. The initial contract that I have is only for 3 months, which brings the total to over 16500 which hasn't reached the 18600 threshold.

In this circumstance, can I apply via Cat B which I can prove for the past 12 months my earnings were well above the requirement?

Many thanks for your help.

You can't count the entire contracted earnings - there's expenses, VAT and Corporation Tax to consider. You can only count what your draw in salary and dividend, remembering to leave sufficient in the company for paying the above expenses/taxes. Your accountant will advice you.

You must leave leave enough money in the business to cover these - or you will be trading insolvently....

[CR001]

Would probably have been simpler to apply for the visa before leaving your well paid permanent job.

[Not a ghost]

Thanks for the feedback guys!

I understand my current contract would be 3 months initially, but it is likely to be extended.

I read from somewhere that if I can get my contracting employer to draft a letter confirming that my 3 months initial contract would likely to be extend (or a rolling contract), would that work in my favour or am I talking bananas?

[Wanderer]

Thanks for the feedback guys!

I understand my current contract would be 3 months initially, but it is likely to be extended.

I read from somewhere that if I can get my contracting employer to draft a letter confirming that my 3 months initial contract would likely to be extend (or a rolling contract), would that work in my favour or am I talking bananas?

Bananas I'm afraid.

He's not your employer, it's a B2B relationship and any talk of employer or employment would most likely put you under IR35 and liable to taxed as an employee without any employee rights, not what you want. Rolling contracts are a definite pointer to being IR35 caught, again, not what you want.

When you are contracting your effectively liable to canned on day one, or day two ad infinitum, no notice, no pay.

Hop along to Contractor UK Forum, though you do need a thick skin, some on here have been along and been spat out, but I suspect those types are the ones now facing massive ILR tax fiddling issues if you look in that forum, of course they knew better....