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Thread: Independant Contractor

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    Independant Contractor

    Hi

    I need advice please. I am planning on consulting to my existing company as well as other clients. Whats the best option for me. I will have many clients and will be charging them a daily rate for IT Business consulting services.

    I was planning on opening up a CC but then I would have to change all my income generating expenses to the companies name, is that correct. If I go as an independant contractor, would this be a better solution. I would also like to register for VAT as an independant contractor, is this possible.

    Please send me feedback as I am so confused. Also, what type of expenses are allowed as deductions for paying PAYE.

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    Site Caretaker Dave A's Avatar
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    It really is a good idea to have your business and your personal lives as seperate legal entities. The only hiccup in saying "go for a cc" right now is that it seems cc's are on their way out.
    The trouble with opportunity is it normally comes dressed up as work.

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    Diamond Member wynn's Avatar
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    Check with your accountant how much (80%) of your income may come from one source.
    Otherwise you may lose tax claims.

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    I wont be getting 80% of my income from one client. I will have between 2 to 3 clients each month, I would say total for the Year would be about 40% from one client.

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    Silver Member Vincent's Avatar
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    Quote Originally Posted by Dave A View Post
    It really is a good idea to have your business and your personal lives as seperate legal entities. The only hiccup in saying "go for a cc" right now is that it seems cc's are on their way out.
    You can register a CC till 31-12-2009 - no new registrations after 1 Jan 2010
    Existing CCs will remain in existence for 10 years after 1 Jan 2010, thereafter they will be replaced by a company with similar features.
    Vincent Marino
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    Independant Contractor

    Hi

    I am an independant contractor and need to find out if I need a tax certificate or some sort of proof that I can give to a client so they do not deduct PAYE. I have a contract that has a clause that I am an independant contractor and that the company is not liable for any tax deductions or any issues relating to SARS. They said they need proof that I will be paying my own tax.

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    Site Caretaker Dave A's Avatar
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    Apply for a tax directive from SARS. If you are registered on eFiling, often times you can do it online there.

    A tax clearance certificate might also go a long way to settling butterflies.
    The trouble with opportunity is it normally comes dressed up as work.

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    Silver Member Graeme's Avatar
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    IT Contractors watch out!

    When I was working I noticed that all of our independent IT contractors worked as cc's - I gather that their main reason for doing so was in order to receive the protection of the "limited liability" feature of a cc. Back then if there was a hiccup in one of their programs and it cost us money, they could be sued for damages, and if not a cc, they were personaly liable for perhaps a huge amount of money.

    That was a while back - has anything changed? Don't think so.
    Last edited by Graeme; 10-Nov-08 at 07:56 PM.

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    just me duncan drennan's Avatar
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    Quote Originally Posted by twofly View Post
    They said they need proof that I will be paying my own tax.
    Quote Originally Posted by Dave A View Post
    Apply for a tax directive from SARS. If you are registered on eFiling, often times you can do it online there.

    A tax clearance certificate might also go a long way to settling butterflies.
    I don't think that SARS issues this type of tax directive any more. A tax clearance certificate, along with a letter from your accountant may help.
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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by duncan drennan View Post
    I don't think that SARS issues this type of tax directive any more.
    I was quietly wondering myself as I see SARS has gone down the route of a different form for each different type of tax directive. My theory was if I was wrong, someone would correct me

    Thanks Duncan.
    The trouble with opportunity is it normally comes dressed up as work.

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