LTD company for occasional freelance work. Is it going to cost more than I will earn

[newtothisgame]

Hello
I hope you can help. I will read through various threads as well but would like some advice asap.

I have been offered some freelance work. It would be £2000 per piece of work and I might be able to do 12 of these pieces of work per year (could be a few more or a lot less - so could be 6 a year).

The recruitment agency who have found this work for me have advised me that I would have to either be paid via an umbrella company or set up a Ltd Company.

My questions are

Would it be worthwhile being a LTD company for such a low income? ( I don't do any other work and don't plan to this coming year).

Would I pay a lot of charges for an umbrella service - I did this several years ago when working full time and seem to remember the charges were surprisingly high at that time.

Any advice welcome. I will read through other threads but there are so many and this is completely new to me (apart from a brief time about 6 years ago working via an agency and paid by umbrella).

i need to let the agency know by the end of this week so time is of the essence.

Thanks in advance for any advice

[ladymuck]

Umbrellas don't tend to like sporadic work but it's worth describing the scenario to a couple and see what they say.

Will the agency run a payroll for you? Sounds like they won't or they'd be offering it.

I'd be hesitant to set up a LtdCo for this but that may end up being your only option.

[eek]

Umbrellas don't tend to like sporadic work but it's worth describing the scenario to a couple and see what they say.

Will the agency run a payroll for you? Sounds like they won't or they'd be offering it.

I'd be hesitant to set up a LtdCo for this but that may end up being your only option.

I actually think a limited company may be possible but you will need to do the accounts yourself to make it worthwhile

And that's possible if you get a Mettle (Natwest) bank account as Freeagent is free with that and they now do the CT600 for you.

But you would need to keep things incredibly simple - which might be possible if you are doing this on top of another job (so taking the money via dividends rather than payroll).

If you are doing it as your sole income it's going to be a problem.

[ladymuck]

I actually think a limited company may be possible but you will need to do the accounts yourself to make it worthwhile

And when the OP comes back to ask for help, I can imagine the ribbing they'll get...

[eek]

And when the OP comes back to ask for help, I can imagine the ribbing they'll get...

It's only a problem if you try to be clever - running your own accounts isn't much of a hassle using Freeagent (I know you don't use it). If all the OP needs is money coming in and out via dividends and they can avoid paying a salary there is little effort involved.

[jayn200]

It's only a problem if you try to be clever - running your own accounts isn't much of a hassle using Freeagent (I know you don't use it). If all the OP needs is money coming in and out via dividends and they can avoid paying a salary there is little effort involved.

Yeah i agree plus no need for vat registration either.

[northernladuk]

Back in the day we used to say that 30K was the threshold where using a LTD started to eclipse a brolly dependent on some factors. The expense policy changed so I'd expect that figure to change slightly but there hasn't been enough movement in taxation for this figure to be much different I don't think. So based on that I'd say deffo brolly.

[Manic]

Question not asked yet which will have a big impact. Will the work fall inside IR35 legislation?

[northernladuk]

Question not asked yet which will have a big impact. Will the work fall inside IR35 legislation?

I know assumptions can be a dangerous thing but reading the OPs post what do you think it will be? Is he working like a disuised permie? Would the agency have offered LTD if it was inside?

[eek]

Question not asked yet which will have a big impact. Will the work fall inside IR35 legislation?

It's £2000 per a piece of work - so outside IR35 Statement of Work type projects without any control required.