Short term contract offer advice

[CoolerKing]

Hi,

I have been offered a 6month contract and ideally will not be looking to extend it any further than that.

What options do I have as an alternative to setting up a new ltd company, hiring accountants etc.....
Would I still have to be VAT registered?

Is there an 'umbrella' alternative available or some managed Ltd company service that can handle this for me?

Advice appreciated.

[northernladuk]

Have a look in the forum I linked below and you will find 2 sticky posts that will answer your questions.

Umbrella Companies

Also read the newbies guides to the right and research the options. This really is your decision to make not ours.

[TheFaQQer]

Hi,

I have been offered a 6month contract and ideally will not be looking to extend it any further than that.

What options do I have as an alternative to setting up a new ltd company, hiring accountants etc.....
Would I still have to be VAT registered?

Is there an 'umbrella' alternative available or some managed Ltd company service that can handle this for me?

Advice appreciated.

Whatever route you are taking, make sure you understand fully the implications of only having one place of work with regards to claiming expenses.

If you are Ltd, and your VATable turnover exceeds the registration threshold, then you need to register for VAT. If neither applies, then you don't.

[northernladuk]

Could do with a lot more context of your situation before any reasonable advice can be given. Same company, dipping in to contracting before going back perm, yadda yadda.

[socialworker]

If you are only intending to do contract work for six months then go back to permanent employment I would say it is not worth setting up a limited co. If you meant that you intend to do this six month contract then find further contract roles for at least a year then it may be, though probably only really worth it if you are comfortable that you are outside IR35.

Personally I have a ltd co though I am inside Ir35. The monetary advantage is very slight, just the VAT flat rate scheme and being able to clsim travel to a temp workplace and accommodation, remembering I only benefit by 20% of 45p per mile. If I were only going to have one gig I couldnt even claim that (look it up). Plus it saves the hassle when the agency doesnt want to deal with your umbrella. That's it really. I mostly just wanted to understand what it was like running a company, if it it were just the money I prob would not bother. If you think you are safely outside Ir35 then remember the cost of contract checks and additional insurance that everyone recommends on here.


My reasoning is that most accountants charge a monthly fee on the basis that you are going to use them for at least a year in which case the 12 monthly payments cover them doing your end of year returns. If you stop using the in under a year you will have to do them yourself or pay a seperate fee. There are other reasons too; admin involved in closing down your ltd, the 2year rule on travel, costs of insurance, probably also on an annual basis.

If you only intend to contract for six months I would suggest a good umbrella co would be far the easiest option and save you getting into a mess with tax, the peace of mind would be well worth it to me but to each his own.