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dermot341
17th July 2013, 10:16
Hi

All the guides here, and elsewhere, mention the options of Ltd company, Umbrella's and PAYE etc

Was wondering why there is no mention of working as a sole trader. I understand that Ltd give us you limited liability protection but other than that is there a specific reason why contractors tend not to be sole traders.

I did some contract work a few years back through an Umbrella company. Whilst it was generally OK, I found the costs involved annoying (but understandable) and the time scale of getting paid silly.

Might have a bite at some more contract work coming up so wondering about Ltd or being a sole trader.

Thanks for any help you can provide

Dermot

stek
17th July 2013, 10:50
Agencies Act

malvolio
17th July 2013, 12:11
By all means go Sole Trader if you don't mind being paid on 90 day terms. You won't get any work though, so being paid late isn't really a concern.

Blame the Tories (for once). People used to work as sole traders and not pay any taxes. A bill was brought in to make the next person up the chain liable for the taxes, which was normally the agency. Hence the intermediary company (yours or an umbrella). Agencies won't touch you unless there is an intermediary.

None of which applies if you can get your own work direct from the end client of course. Then you're back into 90 day payments...

northernladuk
17th July 2013, 16:08
Agencies and clients just won't touch sole traders. Wrong level of business for that model.

SueEllen
17th July 2013, 17:40
None of which applies if you can get your own work direct from the end client of course. Then you're back into 90 day payments...

Not all direct clients pay with 90 day payment terms.

They do anything from 14 up to 90 with the average being a month in arrears.

However like with agencies a few refuse to deal with sole traders and will direct you to an umbrella company as they don't want to risk you trying to claim employment rights.

LisaContractorUmbrella
18th July 2013, 09:59
There is potential debt transfer for an agency/client working with a sole trader if they don't pay their tax bill which is why most of them won't do it