Moving from Umbrella to LTD @ contract renewal > Any advice or tips

[miniweld]

Hi there.

I am currently employing the services of a certain Umbrella company, which has been for the case for over two years, on the same employer/contract,bwhich has had numerous renewals.

My contract is up for renewal in July this year and I am thinking about using this opportunity to move over to becoming a ltd company.

Can anybody offer any advice as to whether there is anything I need to be aware of in this particular circumstance, or does it not really matter that I have been with this same employer under an Umbrella company and then LTD?

Would appreciate your advices.

Many thanks

[LisaContractorUmbrella]

The first thing you should consider is your IR35 status; if you are inside IR35 you will be liable for income tax, employee's and employer's NI on your earnings, it is only if you are outside that you can draw dividends from your Ltd Company.

You should research exactly what your liabilities and responsibilities will be as the Director of a Limited Company and make sure that you are prepared to take these on. You should also appoint an accountant who has experience of dealing with contractors.

Oh and 24 month rule sounds like it will apply as well

[miniweld]

Thanks for the reply. I am weighing up those options you mentioned and looking to engage with an accountant

With regards to IR35, would I be more liable to hit this becuase I am still on the same contract, albeit previously it would have been via an umbrella company, rather than my own ltd company. Wonder whether that would be a red flag to the HMRC (though not sure how).

Also, the 24 month rule, are you referring to the fact that there are certain expenses that you cannot claim?

Thanks in advance.

[northernladuk]

http://forums.contractoruk.com/accou...rella-ltd.html

Read the newbie guides and learn how to search....

[LisaContractorUmbrella]

Thanks for the reply. I am weighing up those options you mentioned and looking to engage with an accountant

With regards to IR35, would I be more liable to hit this becuase I am still on the same contract, albeit previously it would have been via an umbrella company, rather than my own ltd company. Wonder whether that would be a red flag to the HMRC (though not sure how).

Also, the 24 month rule, are you referring to the fact that there are certain expenses that you cannot claim?

Thanks in advance.

No offence but I think you should maybe spend a little bit more time researching your obligations as the Director of a Ltd Co before making the jump?

It would be irrelevant in terms of IR35 whether you were moving from brolly to Ltd on the same contract - the 3 main IR35 considerations are supervision, direction and control, mutuality of obligation and right of substitution - are you told what to do, are you obliged to accept work or is the agency obliged to offer it and could you send someone in to work in your place?

The 24 month rule - if you travel to the same location for a period of 24 months or longer you will not be able to claim travel, subsistence and accomodation expenses from the point that you know the contract will extend beyond that period.

[miniweld]

Thanks again for your reply.
I am still thinking about whether to go down this route, hence my questions and also checking out the numerous guides on the site.
I am Intrigued by your comment about checking out my obligations as a company director. At a high level, could you elaborate on that, just so that I am not missing anything??

Many thanks

[TheFaQQer]

I am Intrigued by your comment about checking out my obligations as a company director. At a high level, could you elaborate on that, just so that I am not missing anything??

I think you'll find everything you need here.

HTHBIDI

[LisaContractorUmbrella]

WTFS

[miniweld]

Thanks for that.

[LisaContractorUmbrella]

Thanks for that.

Try this: https://www.gov.uk/running-a-limited...sponsibilities