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cmscotland
21st December 2011, 11:48
Hi everyone, first post on here, I'm making my first move into contracting having been offered a role with RBS and I'm a bit conflicted by the different options of Umbrella v Ltd and also the sheer volume of choice in Umbrella Suppliers / Contractor Accountants.

I was initially going to just go for an umbrella to make life easier but I've been thinking that with the tax benefits of a Ltd it might be a better option, especially as it seems there are plenty of services out there to help with the setup and then the accounting, really just wondering if I am looking at a Ltd Co are there any really good companies/services that I should be going to in regards to Company Formation and then the on-going accounting?

Thanks folks,

Chris

administrator
21st December 2011, 13:08
Hey Chris,

Thanks for joining the forum, welcome to the world of contracting!

How long is your initial contract? Do you intend to stay contracting? If the length of the contract is 6 months or more and you feel that you are likely to look for contracts after this initial one and not jump straight back into permie then Ltd Co is probably the better option. I say probably as it also depends on the IR35 friendliness (or not) of your contract.

Have a look here for a range of specialist contractor accountants:
Directory of Contractor Accountants - accountancy services providers for IT contractors :: Contractor UK (http://www.contractoruk.com/directory/accountancy_services.html)

A lot of them offer company formation and bank account set up etc so contact them, read some of the threads on the forum and Google about them and you will be in a good position to make an informed choice on who you decide to appoint.

A quick note, this forum gets very well indexed by Google and using your name is not always handy, so if you want a different username then just send me a private message :D

Kind Regards

Admin

cmscotland
21st December 2011, 13:24
Thanks for the reply!
Initially it is a short contract but I'm intending to do this long term really I feel at the moment that its going to give memore flexibility and broaden my experience.

I will take a read over that and see what I think!

administrator
21st December 2011, 13:36
If it is a short contract then bear in mind the costs and extra work involved in the ltd co route. You will need to submit year end accounts etc and deal with bank accounts so they are more work initially but a far better structure for long-term contracting. Any questions just post them in the relevant forum (accounting/legal or business/contracts) and I am sure you will get some good responses. Good luck and congrats on landing the initial contract :D

northernladuk
21st December 2011, 13:56
Welcome to the forums.

There is a Limited V Umbrella sticky post explaining the exact differences and cost differences
http://forums.contractoruk.com/umbrella-companies/7487-should-i-trade-limited-company-umbrella-composite.html

There are plenty of take home calculators to show comparisons via google or in the list to the right.

There are also a whole host of newbie guides to the right you need to understand, particularly IR35 for now as well as how LTD's work etc..

I personally started with Umbrellas knowing they wern't the best but were very easy to use so I could get used to my finances and contracting slowly. Used them for around 6 months I think and then went LTD when I knew a little more and at my own pace. Might have lost a bit of cash from the outset but I didn't cock up or get put off.

Many other guys will tell you to grow some and jump in to LTD which is possible, many do, just depends on how stressed you feel so up to you.

Good luck.

TestMangler
21st December 2011, 13:58
Welcome to the forums.

There is a Limited V Umbrella sticky post explaining the exact differences and cost differences
http://forums.contractoruk.com/umbrella-companies/7487-should-i-trade-limited-company-umbrella-composite.html

There are plenty of take home calculators to show comparisons via google or in the list to the right.

There are also a whole host of newbie guides to the right you need to understand, particularly IR35 for now as well as how LTD's work etc..

I personally started with Umbrellas knowing they wern't the best but were very easy to use so I could get used to my finances and contracting slowly. Used them for around 6 months I think and then went LTD when I knew a little more and at my own pace. Might have lost a bit of cash from the outset but I didn't cock up or get put off.

Many other guys will tell you to grow some and jump in to LTD which is possible, many do, just depends on how stressed you feel so up to you.

Good luck.

Come on NLUK. You're letting the side down !!

You missed "Read the newbie Guide Here -------------------> "

:laugh

MarillionFan
21st December 2011, 14:20
Come on NLUK. You're letting the side down !!

You missed "Read the newbie Guide Here -------------------> "

:laugh

He's on a last warning.

northernladuk
21st December 2011, 14:26
Come on NLUK. You're letting the side down !!

You missed "Read the newbie Guide Here -------------------> "

:laugh

WTF :laugh

What is this then???


There are also a whole host of newbie guides to the right you need to understand, particularly IR35 for now as well as how LTD's work etc..


Am bored so I thought I would put some more flouncy words in than normal but it does the jo... doesn't it??

Clare@InTouch
21st December 2011, 14:39
Hi Chris,

Whether you decide on limited or brolly depends on your situation, including the length of time you'll be contracting and the money you'll be earning. As a general guide, contracting over 6 months with annual income of at least £30,000 makes a limited worthwhile from a tax point of view. There's a bit more admin involved, but any decent accountant will talk you through it and hold your hand as much as necessary.

Many accountants will help with the incorporation and the VAT & PAYE registrations. You'll be looking in the region of £100 for all of that, don't pay more. Some companies will charge separately for CT registration (which happens automatically!) and VAT & PAYE registration, so make sure you know what you're getting up front. I've known people pay £500 for incorporation when they could have got it for so much less.

Call a few accountants, make sure they advise on set up, shares (including issuing shares to your wife if applicable), expenses, taxes and IR35. Find one you're comfortable with as you'll need to be happy you can call or email them with anything and everything that comes up. Call more than one so you can compare advice and personalities :)

BrilloPad
21st December 2011, 14:55
A quick note, this forum gets very well indexed by Google and using your name is not always handy, so if you want a different username then just send me a private message :D

Kind Regards

Admin

Are you trying to tell me that Administrator is not your real name?

cmscotland
21st December 2011, 19:52
Thanks for the replies everyone, I'm going to do some reading tonight but it seems to me that if I'm planning to contract into the future that I might as well just start with the Ltd Co, it seems to me that as long as I've got a decent accounting co that it shouldn't be an awful lot more work and that it gives me more benefits tax wise, especially if I plan on contracting long term.

cmscotland
1st January 2012, 00:02
Whats in a name?
I've read over the information about naming your Limited Company and unerstand all the legalities/things you can't use but hat do people generally use as their name for contracting? Just your name?

Wanderer
2nd January 2012, 17:04
hat do people generally use as their name for contracting? Just your name?

Just use something generic sounding.

I would avoid anything that identifies you personally or your profession. eg, Wander's IT Contracting LTD would be a poor choice for example. For one thing, I may not run the company forever it's going to be a bit odd selling on a company with your name in it. Secondly, you may be an IT contractor forever so you shouldn't put that in the name. One day there may be a lot of money in the company and you may decide to reinvent it as some other thing.

Also, client's generally don't give a hoot what your company is called but don't make it anything silly or something that could potentially infringe someone else's trademark or trading name.

SimonMac
3rd January 2012, 11:39
Whats in a name?
I've read over the information about naming your Limited Company and unerstand all the legalities/things you can't use but hat do people generally use as their name for contracting? Just your name?

I was given the advice don't use First Name Surname IT Contracting etc as it makes you sound like a one man band and more likely to be "picked at random" by Hector for an audit, the theory being if they have to audit 1,000 companies it would be easier and quicker to audit a one man band.

I dunno how much truth is in this but sounds reasonable.

norrahe
3rd January 2012, 18:12
I was given the advice don't use First Name Surname IT Contracting etc as it makes you sound like a one man band and more likely to be "picked at random" by Hector for an audit, the theory being if they have to audit 1,000 companies it would be easier and quicker to audit a one man band.

I dunno how much truth is in this but sounds reasonable.

John Lewis???

Peter Jones

Robert Dyas

Hmmmm!