One for the IT contractors on here ....

[Westdene Seagull]

I'm in for a chance of getting an six month IT contract. Obviously I'd like to get paid but need to be paid through either a limited company or an umbrella company.

The contract will start almost immediately if I'm successful so setting up a limited company in the short term would be close to impossible although long term may be worthwhile.

So that leaves me having to use an umbrella company. Do any of you use this method ? If so, what should I be looking out for ( pitfalls etc ) ? What should I expect to pay ? Any recommendations for who I should go with ?

 

[Papa Lazarou]

You can setup a limited company online in 3 hours. The bank account comes next (Santander are apparently the best), and then you need to get VAT registered and take out liability insurance. The whole thing will only take 2 weeks.

I'm doing the same currently.

 

[Tricky Dicky]

I'm in for a chance of getting an six month IT contract. Obviously I'd like to get paid but need to be paid through either a limited company or an umbrella company.

The contract will start almost immediately if I'm successful so setting up a limited company in the short term would be close to impossible although long term may be worthwhile.

So that leaves me having to use an umbrella company. Do any of you use this method ? If so, what should I be looking out for ( pitfalls etc ) ? What should I expect to pay ? Any recommendations for who I should go with ?

J
I was contracting 3 years ago and wanted the solution of least hassle. My agency suggested one umbrella company, it took quite a long time on the phone answering questions to set it up, but after that I had to do nothing and got paid as if I was perm, no hassle at all.

Of course you pay for the service, but I thought it was cheap for something so simple and convenient. From memory my contract was £800 per day but the fee was something like £16 per week (I think), so pretty insignificant in the scheme of things.

 

[Papa Lazarou]

If you do have to use an umbrella, Tarpon are well regarded.

 

[Badger]

I use a limited company and it is by far the most tax efficient method. I'm not sure why you say it would be impossible to set up a limited company, it takes a matter of hours to set it up initially and everything should be in place by the time you get your first payment. I would recommend using an accountant that specialise in this area, I do all mine through Crunch Accounting, they set everything up for you and give you access to software to record all your sales and expenses.

 

[Westdene Seagull]

I use a limited company and it is by far the most tax efficient method. I'm not sure why you say it would be impossible to set up a limited company, it takes a matter of hours to set it up initially and everything should be in place by the time you get your first payment. I would recommend using an accountant that specialise in this area, I do all mine through Crunch Accounting, they set everything up for you and give you access to software to record all your sales and expenses.

Thank you all. I'll look at a ltd company. I've always heard good things about Crunch and Darren Fell is a very down to earth bloke so I'll probably do it your way Badger.

 

[Herr Tubthumper]

Thank you all. I'll look at a ltd company. I've always heard good things about Crunch and Darren Fell is a very down to earth bloke so I'll probably do it your way Badger.

Ltd is the best way IMHO. And takes next to no time to set up if you take an off-the-shelf company. Also look into flat rate VAT.

 

[Badger]

Thank you all. I'll look at a ltd company. I've always heard good things about Crunch and Darren Fell is a very down to earth bloke so I'll probably do it your way Badger.

They make things very easy. You need to have a few conversations with them to get everything set up, then after that there's very little admin, you just need to enter sales/expenses/salary into their software and they'll send you an email (followed by reminders) if you need to do anything tax related e.g. VAT returns. They also tell you about expenses you are entitled to claim when they do your end-of-year company accounts and for a fee they'll do your personal tax return too.

 

[nevergoagain]

I'm in the process of doing this, Brooksons are the accountants I chose and they sorted out all of my insurances as well. They'll take care of all tax/VAT issues for both my personal returns and the company and handle all the usual expenses, invoicing etc. They also get a direct feed from my company bank account daily so I can view my accounts fully from a single portal.

 

[Cian]

Do not believe, in any way shape or form, the figures of "what you'll be able to claim as tax-free expenses" that any umbrella company tell you. If you even try HMRC will be after you.

I did all mine through a Ltd (albeit in a different jurisdiction) mainly because I found the sales pitches of the umbrella firms nauseating more than anything else; its not a huge effort and is more cost effective. Just becomes annoying when you're no longer contracting.

 

[Joey Jo Jo Jr. Shabadoo]

I used Parasol when I was contracting a few years ago. I think they were taking about £80 a month and I was clearing 3-4k a month take home depending on workload. They would let me claim a certain amount for mileage/train travel and a food allowance a day and I never had any problems HMRC. I could have made more setting up as limited company but to be quite honest I just wanted an easy solution. All I had to do was send in my time sheets and work out what mileage etc I was going to claim, they did the rest and paid me on a weekly basis.

 

[Napper]

J
I was contracting 3 years ago and wanted the solution of least hassle. My agency suggested one umbrella company, it took quite a long time on the phone answering questions to set it up, but after that I had to do nothing and got paid as if I was perm, no hassle at all.

Of course you pay for the service, but I thought it was cheap for something so simple and convenient. From memory my contract was £800 per day but the fee was something like £16 per week (I think), so pretty insignificant in the scheme of things.

£208,000 a year

Good work !

 

[Westdene Seagull]

Just becomes annoying when you're no longer contracting.

Can you not just make the company dormant ?

 

[Cian]

Can you not just make the company dormant ?

Yeah, its being arsed to do the paperwork for that and the annual form/fee that's the issue.

 

[kano]

What were you doin to earn £800 a day may I ask?

I have always been a permie I do alright so I have never considered contracting but for that kind of wedge I would have to seriously think about it

 

[Tim Over Whelmed]

I'm in for a chance of getting an six month IT contract. Obviously I'd like to get paid but need to be paid through either a limited company or an umbrella company.

The contract will start almost immediately if I'm successful so setting up a limited company in the short term would be close to impossible although long term may be worthwhile.

So that leaves me having to use an umbrella company. Do any of you use this method ? If so, what should I be looking out for ( pitfalls etc ) ? What should I expect to pay ? Any recommendations for who I should go with ?

Ltd Co will take you about 20 minutes to sort and £15

 

[Westdene Seagull]

What were you doin to earn £800 a day may I ask?

I have always been a permie I do alright so I have never considered contracting but for that kind of wedge I would have to seriously think about it

He's very lucky to have got that much - the rates I'm looking at average £400 a day ( still decent though ! ). Also remember there are extra risks as a contractor - no paid holiday, no employers pension contribution etc.

 

[daveinprague]

IP contractors at KPNQwest in Holland were earning 98 quid an hour... so its very doable...

 

[Deleted member 22389]

I'm in for a chance of getting an six month IT contract. Obviously I'd like to get paid but need to be paid through either a limited company or an umbrella company.

The contract will start almost immediately if I'm successful so setting up a limited company in the short term would be close to impossible although long term may be worthwhile.

So that leaves me having to use an umbrella company. Do any of you use this method ? If so, what should I be looking out for ( pitfalls etc ) ? What should I expect to pay ? Any recommendations for who I should go with ?

Set up as a sole trader or doesn't it work like that for contract work.

 

[Brovion]

I'm in for a chance of getting an six month IT contract. Obviously I'd like to get paid but need to be paid through either a limited company or an umbrella company.

The contract will start almost immediately if I'm successful so setting up a limited company in the short term would be close to impossible although long term may be worthwhile.

So that leaves me having to use an umbrella company. Do any of you use this method ? If so, what should I be looking out for ( pitfalls etc ) ? What should I expect to pay ? Any recommendations for who I should go with ?

Do it as a limited company. I've been contracting pretty much continuously (with breaks, some voluntary, some enforced) since 2001. You're not going to be paid from Day One so you've got plenty of time so get it all sorted - the bank account usually takes the longest. You can always get your first payment delayed until you've got an account to put it in, the agency will understand. However the whole thing should be well done and dusted in a month. I've never met a contractor who has been 100% happy with an umbrella company, when it's your own LTD you've got so much more flexibility.