Moving mid contract umbrella to ltd

**Sockpuppet** · 5 January 2012, 21:33

You can't transfer the expense claims. Either they happened when you were employed by the Ltd or when you were employed by the Umbrella. So either you pay them from your Ltd or from your umbrella depending on who you were employed by at the time you incurred them.

Most agencies won't let you chance part way through a contract. Depending on the length left to run it might be easier to wait and do it at renewal.

**escapeUK** · 5 January 2012, 21:38

Originally posted by jonpd View Post

If I was to move mid-term, what happens to the expense claims etc? is this easy to transfer (assuming a transfer is required)

The saving in NI would dwarf all but the most extreme expense claim.

**kingcook** · 5 January 2012, 21:49

Originally posted by jonpd View Post

I have been contracting for a couple of years via an umbrella co.

I am a couple of months into a contract, and considering moving to a ltd co vehicle.

I've had a search on the forum and read mixed reviews about moving mid-term.

If I was to move mid-term, what happens to the expense claims etc? is this easy to transfer (assuming a transfer is required)

I waited until contract renewal time when i did this. No problems with the agency, they just made sure the new contract issued was for a ltd co.

**Wanderer** · 6 January 2012, 00:14

Originally posted by jonpd View Post

I am a couple of months into a contract, and considering moving to a ltd co vehicle.
If I was to move mid-term, what happens to the expense claims etc? is this easy to transfer (assuming a transfer is required)

It's probably easiest to switch at the end of the contract. It depends on how long it's got to run, if it's only a few more months then just let it expire and start the new one with the LTD.

There is no reason why the agency can't terminate the existing contract and follow on with a new one through your LTD the next day though (other than they can't be bothered with the paperwork).

As for the expenses, you keep claiming them through the umbrella until the day you stop working for them and from that day onwards you claim your expenses through the LTD company. You definitely want to get an accountant engaged to make sure you form your company correctly and get everything setup.

**Greg@CapitalCity** · 6 January 2012, 00:54

From an accounting perspective the 'transfer' is easy. Well, its not really a transfer - you would just set-up a brand new ltd company. There would be no transactions to bring across to the Ltd Co, and as mentioned above, any expenses incurred while working through the umbrella stay with the umbrella, and any new expenses incurred after commencing trade through the ltd company go through the company accounts.

For personal tax purposes, just be aware that we are approaching the end the of personal tax year. If your umbrella gross income exceeds £42,475 already, then consider not paying yourself any dividends until after 05 April 2012 - this will help you avoid any unexpected tax bills resulting from those dividends being taxed in the higher rate tax bracket.

**mickey** · 18 February 2014, 07:25

Apologies for digging out an old thread.

1. How would one demonstrate a genuine desire to run own business when switching from an umbrella to ltd mid-contract and staying with the same client?

Originally posted by Greg@CapitalCity View Post

For personal tax purposes, just be aware that we are approaching the end the of personal tax year. If your umbrella gross income exceeds £42,475 already, then consider not paying yourself any dividends until after 05 April 2012 - this will help you avoid any unexpected tax bills resulting from those dividends being taxed in the higher rate tax bracket.

2. Would one not be slightly better off than 100% PAYE by starting paying dividends immediately?

**northernladuk** · 18 February 2014, 10:38

Originally posted by mickey View Post

Apologies for digging out an old thread.

1. How would one demonstrate a genuine desire to run own business when switching from an umbrella to ltd mid-contract and staying with the same client?

2. Would one not be slightly better off than 100% PAYE by starting paying dividends immediately?

1. I don't think you need to. As mentioned it is just a business process and all you are doing is switching to a more efficient one. Has no bearing on how you do your work.

2. You cannot pay dividends immediately. They have to be paid from profit... but yes, as soon as is possible. Plenty of calculators on the web (of varying quality I believe) demonstrating the savings.

First job for you would be to speak to an accountant who will explain all this to you before you have to sign up.

I have to wonder if someone is making such a hash of switching from umbrella to LTD are they sure they are capable of running the LTD properly?

Moving mid contract umbrella to ltd