Sole Trader vs LTD vs Umberlla

[dx4100]

Hi all

Just wanted to know what other peoples thoughts was on this...

My friend is going to be doing a one off spell of consultancy for his friends firm. He will be giving some advice and ideas on how to improve his website and how to make the site more search engine friendly etc.

He has agreed a charge of £50 p/h and will be doing about 10-15 hours a month over about 6 months. So by my numbers that's only about £4500 income. He has a current job paying over £40k a year. So he will be in the 40% tax bracket etc. He is also working on the basis of not being IR35 caught. His mate isnt arsed which route he goes down as long as he invoices him properly. He also is not arsed if his invoice includes VAT or not which also opens the flat rate question.

So the question which structure would be best for him. There is a slight chance that he may continue contracting in the future but now he is aiming at just six months.

In my head the best and only realistic route would be sole trader but I wanted to check with you guys on your thoughts.

[Pondlife]

Why doesn't he just take the 4.5K and declare it as additional earnings on his Self Assessment?

It doesn't seem worth the overhead of brolly fees or Ltd Co accounting costs for this amount of work IMO.

[Moscow Mule]

Why doesn't he just take the 4.5K and declare it as additional earnings on his Self Assessment?

It doesn't seem worth the overhead of brolly fees or Ltd Co accounting costs for this amount of work IMO.

Agree. Just send an invoice from the individual & declare on SA.

Don't worry about VAT - he won't reach the threshold.

[dx4100]

Why doesn't he just take the 4.5K and declare it as additional earnings on his Self Assessment?

I guess that would be a lot simpler

I take it that would not allow the deduction of any expenses ?

[sweetandsour]

I would say Sole Trader is preferable if the client is OK with that. No company to create, just declare the extra earnings.

It is what most of us would do if we were able.


10 to 15 hours work per month for six months for website advice and search engine optimisation? Nice work if you can get it.

[dx4100]

10 to 15 hours work per month for six months for website advice and search engine optimisation? Nice work if you can get it.

That was my first reaction

[dx4100]

I would say Sole Trader is preferable if the client is OK with that. No company to create, just declare the extra earnings.

It is what most of us would do if we were able.

That was my thoughts...

He just needs to keep a record of his incomings and outgoings right ? Keep his receipts etc... Right ?

Looks like a £4500 laptop is in order

[dx4100]

Am I also right in thinking IR35 is not an issue full stop for sole traders ?

EDIT: Found answer in another post... IR35 dose not apply to sole traders...