With most public sectors being hit by swathing government cuts, it comes as no surprise that retired and former police officers are being attracted back to the Police Service to provide managerial, specialist and investigative support on a consultancy basis.

Striking the balance between too many officers and not enough is no easy task. It only takes one or two major cases for the police service to struggle with demand. It’s not like you can train up investigators within a few days. Experienced and highly-skilled retired and former police officers are no different to highly skilled IT professionals, project managers or oil and gas engineers.

Consulting as a former policeman and retired policeman also makes financial sense for both sides. In the private sector i.e. the sector most driven by efficiency, companies have used consultants and contractors rather than bearing the long-term cost of a full time, highly paid employee.

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If you are retired and used to work for the police service, how do you find work and what’s the best and most tax efficient way to work?

We cover the main aspects of what you should consider when deciding to consult:

1. Jobs for retired or former police officers
2. Rates of pay for police consultants
3. Should you set up a limited company or work through an umbrella company?
4. How to go about setting up your limited company as an retired or former policeman

Limited company advantages

• The most tax-efficient way of contracting.
• Access to the Flat Rate VAT Scheme – an incentive that can bring in additional income for those consultants that claim very few expenses.
• You have complete control over your financial affairs – no need to wait on a third party to retrieve your money.
• You can claim on a much wider range of expenses than if you were working through an umbrella company.

Umbrella company advantages

• Easy to use - you simply enter your time-sheet and expense details to the umbrella and wait to be paid.
• You won’t have the burden of filling out paperwork, and all tax and NI is automatically deducted before you receive your money, so you won’t need to worry about having to pay out any more for tax.
• Very helpful for those who are giving contracting a go for the first time, before entirely committing to the lifestyle.

Limited company disadvantages

• There will be some paperwork involved, however, an accountant will be able to help you with this should you have any concerns or questions. This paperwork shouldn’t take up any more than 15-20 minutes of your time a month.

Umbrella company disadvantages

• You will be relying on the umbrella to collect your money from the company and then pay this to you.
• As this type of contract is very similar to working as a permanent employee, it is the most expensive way of contracting as you pay full PAYE, Tax and NI.

For more information on choosing which way of working is best suited to you, you may find our contracting for the first time and limited company vs umbrella guides useful.

How to set up your own limited company as a former police officer

If you have decided to consult through your own limited company, you will need to go through the following steps:

• Firstly, you will need to have your company name decided.
• Then you will need to form your limited company. This will take you no more than five minutes on Caroola’s website with your company formed within a few hours. Caroola’s company formation package is £125 plus VAT, which includes; help organising your company bank account, registering the company for VAT and PAYE and advice on the optimum share structure of your company.
• After forming your limited company, your next step is to appoint an accountant.

It’s tempting to use a local accountant who is convenient for you, however, they may not specialise in consultant accounts. For over 27 years, Caroola has specialised in providing tax and accountancy advice to over 15,000 limited company contractor, freelancer and consultant clients.

We offer all-inclusive fixed-fee accountancy packages. This includes:

• Year-end accounts
• Corporation tax
• Payroll Bureau
• Dividend administration
• Dealing with HM Revenue and Customs and Companies House
• Quarterly VAT Calculations
• Support with Annual Returns
• Personal Taxation
• Access to your own dedicated accountant for all help and advice
• Free bookkeeping software

Check for more detail.

Something that retired and former police officers might have in the back of their minds when considering a consultancy role is IR35, and whether there are any special rules that apply to them – such as the public sector reforms that have been in place since April 2017, and the upcoming private sector reforms in April 2021. Working within the public sector (and soon - the private sector too), the end hirer has the responsibility of determining IR35 status and police consultants should pay close attention to their status determination.

The good news is that determining the IR35 status of the assignment is now the responsibility of the public sector organisation. This means less for you to worry about. Remember if you do pick up a contract in the private sector this will be your responsibility, at least until April 2021. Caroola can help you with that.

As a police consultant, you would be working under the same tax legislation as all other limited company directors. Our guide to IR35 for contractors covers all you need to know on this topic. Our services are also supported by the reassurance of our customer promise.

Contact Caroola

If you have any questions about contracting, setting up your own limited company or appointing an accountant, our advisers are available on the number below:

Guide to Contracting

Perm to Contracting Guide