Not sure, Umbrella or Ltd ?

[JoeyD]

Hi All,

Newbie here so be gentle.

Been offered my first contract and don't know whether to use an Umbrella Company or start a Limited Company.

My agent suggested that I use a company who does something with off shore tax havens or something but I didn't understand it. He told me it was risk free and I would get 84.5% of my rate back with no tax or something.

I'm sure someone on this forum must have heard of all this stuff before and would appreciate some advice.

Kind regards,

Joe.

[cojak]

Hi All,

Newbie here so be gentle.

Been offered my first contract and don't know whether to use an Umbrella Company or start a Limited Company.

My agent suggested that I use a company who does something with off shore tax havens or something but I didn't understand it. He told me it was risk free and I would get 84.5% of my rate back with no tax or something.

I'm sure someone on this forum must have heard of all this stuff before and would appreciate some advice.

Kind regards,

Joe.

Yes, do not believe this agent.

It is not risk-free. Read up on the threads here (especially those in Accounting/Legal) and if you want to go umbrella speak to one of the companies that post on here.

And welcome to CUK

[captainham]

Unless you want years of stress when HMRC finally catch up with you, I would steer well clear of any such "80+%" promises.

Feel free to name the agent too, good for the rest of us to know about the shenanigans that some of the more unscrupulous ones are up to...for all you know, the agent might be getting commission for recommending you to the offshore umbrella co.

[JoeyD]

Yes, do not believe this agent.

It is not risk-free. Read up on the threads here (especially those in Accounting/Legal) and if you want to go umbrella speak to one of the companies that post on here.

And welcome to CUK

Thanks man. I thought it sounded a bit unlikely. I told the agent that I didn't live on the Isle Of Man but he tried to tell me it didn't matter.

It all just strikes me as being so difficult. The contract is for great money (£180 a day !!!!) but I really don't want to have to do all this difficult stuff. Is there not a service that I can pay for or something that will do it all for me ? I just want to go to work, come home and spend my money. Really don't want all the aggro of Umbrellas and ltds or moving to the Isle of Man or whatever.

Peace and regards guys,

Joe.

[LisaContractorUmbrella]

If you are living in the UK, working in the UK and are tax resident in the UK then you must pay UK taxes - any sort of alternative is not going to be risk free, far from it

[garethevans1986]

I would recommend using an Umbrella for your first contract - most will let you switch midway once you've got your own Limited Company setup - you never know, contracting may not be for you and this way is easier for the first contract.

GE

[captainham]

I would recommend using an Umbrella for your first contract - most will let you switch midway once you've got your own Limited Company setup - you never know, contracting may not be for you and this way is easier for the first contract.

GE

This is purely subjective. Running a Ltd is arguably no more difficult, particularly if you have a decent accountant behind you.

It depends on your situation, of course, how long you think you will be contracting, etc, but you cannot apply one or the other as a hard and fast rule that is relevant in all cases.

[JoeyD]

Thanks for all the advice. I'd written something else but it isn't showing up. maybe i did something wrong. Am not very good with computers.

I've phoned an accountant and asked him lots of terribly stupid questions and I'm going to go with a limited company I think. The accountant said he'd pretty much take all my worries away for £170 a month, which sounds great.

Peace and regards,

Joe !

[captainham]

I've phoned an accountant and asked him lots of terribly stupid questions and I'm going to go with a limited company I think. The accountant said he'd pretty much take all my worries away for £170 a month, which sounds great.

That is COSTLY. I'd want more than my worries taken away for this, I'd want tea and toast in bed each morning too.

Plenty of contractor-specialist accountants post on here, and charge nowhere near that much. I'll try and dig out NLUK's thread on this.

[captainham]

Here it is:

http://forums.contractoruk.com/accou...-requests.html

Also some additions to this list, such as Jessica @ Whitefieldtax who has recently joined the forum. Ring around and see which one you like the sound of, but I definitely wouldn't be paying £170...