Contracting & Umbrella Companies..? HELP
Discussion
Mechanical Design and Project engineer. Consumer Goods.
The story goes : Made Redundant last year, several months off and now been out of work for a while.. Applying like Billy'o' for the last few months to no avail.
I've had a meeting with a company who used to do work for me and have been asked to do some Freelance Design and Development work. Rather than price work, it would be more beneficial to both if I bill them for my hours worked and expenses.
Not being registered self employed or ltd company etc etc.. I thought about using an Umbrella company to take care of the monetary side of things. This is likely to be a 2 month project.
What is the PH view of using someone like Giant/ umbrella4contractors..?
Any recommendations / Pitfalls.
I'm likely to get the go ahead in the next day or two, so need to act fast.
TIA for help..
Dave
The story goes : Made Redundant last year, several months off and now been out of work for a while.. Applying like Billy'o' for the last few months to no avail.
I've had a meeting with a company who used to do work for me and have been asked to do some Freelance Design and Development work. Rather than price work, it would be more beneficial to both if I bill them for my hours worked and expenses.
Not being registered self employed or ltd company etc etc.. I thought about using an Umbrella company to take care of the monetary side of things. This is likely to be a 2 month project.
What is the PH view of using someone like Giant/ umbrella4contractors..?
Any recommendations / Pitfalls.
I'm likely to get the go ahead in the next day or two, so need to act fast.
TIA for help..
Dave
spikeyhead said:
If you're going to continue to be a contractor, then start your own Ltd company.
and read about and understand IR35
Disagree. For a 2-month contract, use a brolly and forget about accountants and IR35. Going Ltd is only worth the hassle if you're actually planning to spend a significant time contracting, *and* you can place yourself outside IR35.and read about and understand IR35
I haven't had the discussion about payment with them yet.. That's for the morning.
What are the issues with the Umbrella Co route...?
I understand that going Ltd Co would be the better option in the long run. I employed quite a few contractors who were in the past.
How Long / Easy is it to set up a Ltd Company..?
What are the issues with the Umbrella Co route...?
I understand that going Ltd Co would be the better option in the long run. I employed quite a few contractors who were in the past.
How Long / Easy is it to set up a Ltd Company..?
deckster said:
spikeyhead said:
If you're going to continue to be a contractor, then start your own Ltd company.
and read about and understand IR35
Disagree. For a 2-month contract, use a brolly and forget about accountants and IR35. Going Ltd is only worth the hassle if you're actually planning to spend a significant time contracting, *and* you can place yourself outside IR35.and read about and understand IR35
bridgdav said:
I haven't had the discussion about payment with them yet.. That's for the morning.
What are the issues with the Umbrella Co route...?
You will pay a lot more tax and a small fee to the brolly.What are the issues with the Umbrella Co route...?
bridgdav said:
How Long / Easy is it to set up a Ltd Company..?
Very easy to do yourself. Even easier if you get an accountant, sign up with them to do your books for a year and they will do it for you.I've used a company called Parasol in the past. Weekly charge of £27.50. They were alright though they were a bit pedantic about filling in forms correctly/confirming identity etc. Seemed to be a lot of jumping through hoops to set it up though it worked ok after that.
Check a couple out and get a feel for what they tell you. They all seem to be much of a muchness and the fees are all pretty similar.
Check a couple out and get a feel for what they tell you. They all seem to be much of a muchness and the fees are all pretty similar.
I was in your position about 18 months ago after being made redundant. I picked up a short term, part time contract (3 days a week for 3 months) and evaluated self employed, Ltd and umbrella, in the end I decided upon umbrella.
My thoughts are;
Umbrella;
Great if you want to 'try out' contracting to see if it suits you, it gives you the ability to walk away with no hassle and no tax owing if you decide that the uncertainty of contracting is not for you. Also, all of the hassle of timesheets, invoices, expenses etc are taken out of your hands.
Self employed;
When I started to pick up more longer term contract work I decided to ditch the umbrella company and go self employed. I liked the idea of having more control of my tax/expenses and also liked the fact that I could still give up contracting without having to wind down a Ltd company etc. To date being self employed has worked for me, I am able to take home a lot more money than the arrangement with the umbrella. I am also able to walk away without too much hassle, simply notify HMRC that I am no longer self employed and job done! There is a lot of advice available to the self employed from HMRC, I was quite shocked how eager they were to help me setup and let me know what expenses I can legitimately claim.
Ltd company;
When I am sure that I will not return to a permy position and will make a longer term go of contracting I will setup a Ltd company, there are several benefits to being a director of a Ltd - mainly from a tax perspective. The reason that I have not setup a Ltd so far relates to the hassle involved with winding one up, although they are very easy to setup they can be a ball ache to wind down. Also, you really need to appoint a decent accountant to make sure that you are getting the most out of being a Ltd company - as a self employed bod I am happy and confident that I can complete my tax return without the help of an expensive accountant!
Having skimmed your mail I would suggest using an Umbrella until you decide if you are going to make a long term commitment to contracting. I used GIANT and found them excellent to deal with, most of the admin etc is on-line and they have excellent tracking facilities. I cannot compare them with other umbrellas but spent several days surfing the net and reading the small print before deciding on them.
Good luck with your contract, you will enjoy being outside of company politics, appraisals, bonus systems etc but the uncertainty can get to you from time to time!
My thoughts are;
Umbrella;
Great if you want to 'try out' contracting to see if it suits you, it gives you the ability to walk away with no hassle and no tax owing if you decide that the uncertainty of contracting is not for you. Also, all of the hassle of timesheets, invoices, expenses etc are taken out of your hands.
Self employed;
When I started to pick up more longer term contract work I decided to ditch the umbrella company and go self employed. I liked the idea of having more control of my tax/expenses and also liked the fact that I could still give up contracting without having to wind down a Ltd company etc. To date being self employed has worked for me, I am able to take home a lot more money than the arrangement with the umbrella. I am also able to walk away without too much hassle, simply notify HMRC that I am no longer self employed and job done! There is a lot of advice available to the self employed from HMRC, I was quite shocked how eager they were to help me setup and let me know what expenses I can legitimately claim.
Ltd company;
When I am sure that I will not return to a permy position and will make a longer term go of contracting I will setup a Ltd company, there are several benefits to being a director of a Ltd - mainly from a tax perspective. The reason that I have not setup a Ltd so far relates to the hassle involved with winding one up, although they are very easy to setup they can be a ball ache to wind down. Also, you really need to appoint a decent accountant to make sure that you are getting the most out of being a Ltd company - as a self employed bod I am happy and confident that I can complete my tax return without the help of an expensive accountant!
Having skimmed your mail I would suggest using an Umbrella until you decide if you are going to make a long term commitment to contracting. I used GIANT and found them excellent to deal with, most of the admin etc is on-line and they have excellent tracking facilities. I cannot compare them with other umbrellas but spent several days surfing the net and reading the small print before deciding on them.
Good luck with your contract, you will enjoy being outside of company politics, appraisals, bonus systems etc but the uncertainty can get to you from time to time!
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