IT Contracting - Umbrella company or what?
Discussion
I am currently unemployed (redundancy after 20+ years) and finding it hard to get a job in the current climate.
I am discussing contracting with a company and would like a bit of advice from the PH cognoscenti as to the best way to proceed.
There are companies who offer umbrella services that seem to take a lot of the leg-work out of the equation - but at what cost? They have to make their money somewhere.
Alternatively would Ltd status provide benefits, how much hassle is this - what impact has IR35 had on contractors.
Is there any further advice that can be offered and are there any large agencies out there that should be avoided like the plague (what is the PH policy on name-and-shame of agencies?).
Thanks
I am discussing contracting with a company and would like a bit of advice from the PH cognoscenti as to the best way to proceed.
There are companies who offer umbrella services that seem to take a lot of the leg-work out of the equation - but at what cost? They have to make their money somewhere.
Alternatively would Ltd status provide benefits, how much hassle is this - what impact has IR35 had on contractors.
Is there any further advice that can be offered and are there any large agencies out there that should be avoided like the plague (what is the PH policy on name-and-shame of agencies?).
Thanks
Hi Russ,
To be honest before I gave an honest opinion on the best way forward for you I would need more info...
If you do not plan on contracting for a long amount of time I really would not bother with setting up a Ltd company, the hassle involved with HMRC and tax returns etc simply are not worth it if your thinking of a one off contract for say 3-6-12 months.
If it is a relatively short amount of time umbrella company is the way forward, to be fair they do not charge much either as they go for a "bulk" approach and have literally 100's if not thousands of contractors employed by them.
You do need to be careful though as Umbrella companies do very quite substantially.
If you want any more advice drop me an email...
To be honest before I gave an honest opinion on the best way forward for you I would need more info...
If you do not plan on contracting for a long amount of time I really would not bother with setting up a Ltd company, the hassle involved with HMRC and tax returns etc simply are not worth it if your thinking of a one off contract for say 3-6-12 months.
If it is a relatively short amount of time umbrella company is the way forward, to be fair they do not charge much either as they go for a "bulk" approach and have literally 100's if not thousands of contractors employed by them.
You do need to be careful though as Umbrella companies do very quite substantially.
If you want any more advice drop me an email...
I would say Umbrella if your looking to go contracting in the short term (< 1 year) as it's less hassle, Parasol and Giant are the big ones that come to mind. If your thinking longer term id say go LTD as its far more flexible.
Costs are similar, its around £25 a week for Umbrella company fees, i pay just under £80 a month to an Accountant.
Regarding IR35, well theres tons of info out there about it (see contractoruk.com) it's not an issue with an Umbrella company as they operate within PAYE. It could potentially be an issue for a LTD company if you declare yourself outside of IR35, it's a very complicated legislation which is poorly implemented and by all accounts a bit of a disaster.
Costs are similar, its around £25 a week for Umbrella company fees, i pay just under £80 a month to an Accountant.
Regarding IR35, well theres tons of info out there about it (see contractoruk.com) it's not an issue with an Umbrella company as they operate within PAYE. It could potentially be an issue for a LTD company if you declare yourself outside of IR35, it's a very complicated legislation which is poorly implemented and by all accounts a bit of a disaster.
paul99 said:
I would say Umbrella if your looking to go contracting in the short term (< 1 year) as it's less hassle, Parasol and Giant are the big ones that come to mind. If your thinking longer term id say go LTD as its far more flexible.
Costs are similar, its around £25 a week for Umbrella company fees, i pay just under £80 a month to an Accountant.
Regarding IR35, well theres tons of info out there about it (see contractoruk.com) it's not an issue with an Umbrella company as they operate within PAYE. It could potentially be an issue for a LTD company if you declare yourself outside of IR35, it's a very complicated legislation which is poorly implemented and by all accounts a bit of a disaster.
I agree. You can normally sort this out after you have started working.Costs are similar, its around £25 a week for Umbrella company fees, i pay just under £80 a month to an Accountant.
Regarding IR35, well theres tons of info out there about it (see contractoruk.com) it's not an issue with an Umbrella company as they operate within PAYE. It could potentially be an issue for a LTD company if you declare yourself outside of IR35, it's a very complicated legislation which is poorly implemented and by all accounts a bit of a disaster.
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