Hello all,
New here, and new to contracting in general. I do apologise for asking a question that has already been asked ad infinitum - I've read a lot of threads and guides, both here and elsewhere, but would love for someone's experienced opinion to help clear things up.
I've been offered a new job, initially as a 12 month contract through Torry Harris. I received advice from another contractor at the company employing me, and he gave a good explanation of umbrella company vs. limited company, and hinted that most of their new contractors in a similar position initially go with an umbrella company and perhaps change to a Limited company after a year or two (that was what the contractor in question had done).
This does seem appealing to me, as my knowledge of running a company is based on what I've read online tonight! However, the idea of making as much money from the job as possible does appeal to me
and there's a couple of other factors that maybe should influence my decision.
Firstly, I spoke to someone at Parasol (who the contractor mentioned as a popular choice, and the general forum "vibe" seems to be they are trustworthy), who was very helpful. I gave him information about my contract (£35,000 p/a, travel expenses around £3/day on the train..) and he emailed me over a quote, stating that "You could take home at least £2,066 each month using our service. This is at least 71% of your gross income." (based on a daily rate of £142.85) - with a £80/month admin fee included. This seems pretty reasonable to me, being used to full time employment, but I'm curious how much more I could *actually* make with the Ltd option, given that it has been hinted that as long as I perform, the contract will be renewed (although he did mention that it may become a permanent role, in which case all this is kind of irrelevant!)
One thing that is confusing my decision is that I have been doing some freelance web dev. work (pretty low value at the minute, but I reckon I could make around £500/month extra on average if I carry on). I've read up a bit on IR35, and it seems to me that my role will be almost a full time role but with contractor status almost as a "technicality", so it would probably mean I was caught by IR35. However, would freelance work for a few clients make me more able to dodge this?
So basically, would I be significantly better off going Limited such that it offsets the extra work involved? My current plan is to go with the umbrella company, and after a year or so, reassess my situation when I understand things a bit better - does this seem sound?
In which case, would changing the contract during the 12 month period from umbrella to limited likely present any kind of problems?
As you can tell I'm a bit overwhelmed by it all, and the path of least resistance appealed unless there are big savings to be made by going Limited. Any advice is much appreciated, and apologies for the length of this essay!
Cheers
New here, and new to contracting in general. I do apologise for asking a question that has already been asked ad infinitum - I've read a lot of threads and guides, both here and elsewhere, but would love for someone's experienced opinion to help clear things up.
I've been offered a new job, initially as a 12 month contract through Torry Harris. I received advice from another contractor at the company employing me, and he gave a good explanation of umbrella company vs. limited company, and hinted that most of their new contractors in a similar position initially go with an umbrella company and perhaps change to a Limited company after a year or two (that was what the contractor in question had done).
This does seem appealing to me, as my knowledge of running a company is based on what I've read online tonight! However, the idea of making as much money from the job as possible does appeal to me
and there's a couple of other factors that maybe should influence my decision.Firstly, I spoke to someone at Parasol (who the contractor mentioned as a popular choice, and the general forum "vibe" seems to be they are trustworthy), who was very helpful. I gave him information about my contract (£35,000 p/a, travel expenses around £3/day on the train..) and he emailed me over a quote, stating that "You could take home at least £2,066 each month using our service. This is at least 71% of your gross income." (based on a daily rate of £142.85) - with a £80/month admin fee included. This seems pretty reasonable to me, being used to full time employment, but I'm curious how much more I could *actually* make with the Ltd option, given that it has been hinted that as long as I perform, the contract will be renewed (although he did mention that it may become a permanent role, in which case all this is kind of irrelevant!)
One thing that is confusing my decision is that I have been doing some freelance web dev. work (pretty low value at the minute, but I reckon I could make around £500/month extra on average if I carry on). I've read up a bit on IR35, and it seems to me that my role will be almost a full time role but with contractor status almost as a "technicality", so it would probably mean I was caught by IR35. However, would freelance work for a few clients make me more able to dodge this?
So basically, would I be significantly better off going Limited such that it offsets the extra work involved? My current plan is to go with the umbrella company, and after a year or so, reassess my situation when I understand things a bit better - does this seem sound?
In which case, would changing the contract during the 12 month period from umbrella to limited likely present any kind of problems?
As you can tell I'm a bit overwhelmed by it all, and the path of least resistance appealed unless there are big savings to be made by going Limited. Any advice is much appreciated, and apologies for the length of this essay!
Cheers
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