About to begin contracting About to begin contracting
Page 1 of 3 123 LastLast
Posts 1 to 10 of 21
  1. #1

    Still gathering requirements...

    Graham has no reputation

    Graham's Avatar
    Join Date
    Jan 2012
    Location
    S.E. London/Kent
    Posts
    35

    Default About to begin contracting

    Hi all, been looking around for information on contracting and came across this forum, having spent the last few hours reading threads on here I decided to register, post up and risk being accused of not using the search well enough to find my answers

    I've been offered a contract which is for an IT support role.
    From what I've read, I believe it probably falls under IR35 as I would be working at a fixed location, reporting to the department manager, using their equipment (due to security), would not be possible to send anyone else in my place (again due to security) and having to work to hours set by them. Also the contract is a daily paid rate not a fixed rate for work delivered.
    I believe there is a high probability of the contract only lasting between 6-12 months but with the option to go permanent following this (which I would be interested in doing).

    I have seen many say that it is worth going LTD if your contract is worth £30k+ p.a. and 6+ months, however not mentioned if its still worth this if you think the contract is likely to fall within IR35.
    Calculators I've found suggest that through an umbrella company I could earn as much as £3.4k a month and through LTD £3.9k a month, I've not found a calculator that tells me how much I could expect to earn through a LTD if falling within IR35.
    I don't believe I would be likely to incur many expenses, travel would be approx £120 a month, subsistence I guess at a pretty standard rate. I may buy additional computer equipment and training/exams however thats not a definite at the moment.

    I have no problem with any additional effort required to go LTD, I just want to ensure I get as much money as I possibly can due to saving to buy my first house.

    I also spotted this reply to a thread which I guess would affect me if I were to take a permanent role following this contract...
    Quote Originally Posted by TheFaQQer View Post
    If you've only had the one place of work, then that becomes your permanent place of employment and you shouldn't have claimed expenses for travel / subsistence.

  2. #2

    My post count is Majestic

    MarillionFan is a fount of knowledge

    MarillionFan's Avatar
    Join Date
    Jul 2005
    Location
    .
    Posts
    35,926

    Default

    Quote Originally Posted by Graham View Post
    Hi all, been looking around for information on contracting and came across this forum, having spent the last few hours reading threads on here I decided to register, post up and risk being accused of not using the search well enough to find my answers

    I've been offered a contract which is for an IT support role.
    From what I've read, I believe it probably falls under IR35 as I would be working at a fixed location, reporting to the department manager, using their equipment (due to security), would not be possible to send anyone else in my place (again due to security) and having to work to hours set by them. Also the contract is a daily paid rate not a fixed rate for work delivered.
    I believe there is a high probability of the contract only lasting between 6-12 months but with the option to go permanent following this (which I would be interested in doing).

    I have seen many say that it is worth going LTD if your contract is worth £30k+ p.a. and 6+ months, however not mentioned if its still worth this if you think the contract is likely to fall within IR35.
    Calculators I've found suggest that through an umbrella company I could earn as much as £3.4k a month and through LTD £3.9k a month, I've not found a calculator that tells me how much I could expect to earn through a LTD if falling within IR35.
    I don't believe I would be likely to incur many expenses, travel would be approx £120 a month, subsistence I guess at a pretty standard rate. I may buy additional computer equipment and training/exams however thats not a definite at the moment.

    I have no problem with any additional effort required to go LTD, I just want to ensure I get as much money as I possibly can due to saving to buy my first house.

    I also spotted this reply to a thread which I guess would affect me if I were to take a permanent role following this contract...
    4

    Nicely crafted post this time. But you haven't actually asked a question.
    What happens in General, stays in General.
    You know what they say about assumptions!

  3. #3

    Still gathering requirements...

    Graham has no reputation

    Graham's Avatar
    Join Date
    Jan 2012
    Location
    S.E. London/Kent
    Posts
    35

    Default

    Quote Originally Posted by MarillionFan View Post
    4

    Nicely crafted post this time. But you haven't actually asked a question.
    Yeah realised that after I posted lol
    Just really want to find out what people think about my situation in regards to whether its worth going Ltd or umbrella?

  4. #4

    Umbrella Queen

    LisaContractorUmbrella 's job has never been outsourced

    LisaContractorUmbrella's Avatar
    Join Date
    Jun 2006
    Location
    Colchester
    Posts
    5,370

    Default

    Hi Graham,

    With regards to you take home pay - if you are inside IR35, there won't be a great deal of difference between your take home Ltd vs Umbrella - there is a sticky in the Accounting/Legal section (I think) which will explain the differences i.e. flat rate VAT scheme and salary to 95% of revenue instead of 100% of earnings.

    It really all depends whether you are intending to be a career contractor or if you are just seeing how contracting goes before making a decision. If it is the latter I would suggest that you use an umbrella company as it is much easier to leave your employment with them than it is to close down a Limited Company. You should then also question whether you want the responsibility of running your own Limited Company - you will need to be organised and disciplined in dealing with paperwork and make sure that you retain enough money in the company to meet your obligations to HMR&C.

    In your situation, especially if the contract is only going to be 6 months, the umbrella route would be the most sensible IMHO
    Connect with me on LinkedIn

    Follow us on Twitter.

    ContractorUK Best Forum Advisor 2015

  5. #5

    Super poster

    The Spartan has more data than eek

    The Spartan's Avatar
    Join Date
    Nov 2011
    Location
    Macron Country
    Posts
    3,124

    Default

    I'm new to contracting and have chosen to use an umbrella company, the reasons I did this were as follows:

    Firstly my contract was only for 6 months
    Secondly as I'm a first timer I wasn't sure whether I'd enjoy and want to remain contracting
    Thirdly I didn't want all the hassle of running a limited company just yet
    Lastly when I'm ready to go limited then it'll be easy to go from an umbrella and set one up

    Obviously these are my personal reasons and many might tirade me because they see limited as the be all and end all, but I just wasn't ready for it and am by no means a seasoned contractor like some of the posters on here.

  6. #6

    Fingers like lightning

    redgiant is good enough for Jehovah!

    redgiant's Avatar
    Join Date
    Dec 2010
    Location
    Pond Hopping
    Posts
    510

    Default

    Quote Originally Posted by The Spartan View Post
    I'm new to contracting and have chosen to use an umbrella company, the reasons I did this were as follows:

    Firstly my contract was only for 6 months
    Secondly as I'm a first timer I wasn't sure whether I'd enjoy and want to remain contracting
    Thirdly I didn't want all the hassle of running a limited company just yet
    Lastly when I'm ready to go limited then it'll be easy to go from an umbrella and set one up

    Obviously these are my personal reasons and many might tirade me because they see limited as the be all and end all, but I just wasn't ready for it and am by no means a seasoned contractor like some of the posters on here.
    Setting up LTDs is pretty easy and there are companies that specialise in setting up LTD companies for you with no real hassle. Couple that with getting a capable accountant and a willingness to learn what is required of the company from HMRC and Companies House (e.g. paying VAT, corp. tax and filling out your tax return etc.) it's pretty easy going and the greater returns over going with an umbrella arrangement are worth it.

  7. #7

    Still gathering requirements...

    Graham has no reputation

    Graham's Avatar
    Join Date
    Jan 2012
    Location
    S.E. London/Kent
    Posts
    35

    Default

    Thanks for the replies everyone.

    Whilst I am tempted to go with an umbrella company due to it being easier. For me its all about the money (so I can save a deposit for a house) and I shouldn't have a problem with affording the time to learn whats needed for running a LTd company.

    That said, I'm still keeping my options open and not committing to either course yet

  8. #8

    More time posting than coding

    Jeremiah@RHJAccountants is too good to be a permie


    Join Date
    Aug 2011
    Posts
    271

    Default

    Just to add my opinion

    if it is a short term contract and you are a first timer testing the water i would go for the umbrella route.

    if you are looking to make the move into contracting full time i would go down the Ltd routeyes it is more responsibility but it you can get a decent accountant who can offer you advice on Flate Rate Scheme VAT, tax planning and lots more.

    What ever you decide good luck

  9. #9

    More time posting than coding

    Joeman has no reputation


    Join Date
    Jan 2008
    Location
    Kent/London City
    Posts
    298

    Default

    If it was me i would go LTD and assume NOT under IR35.
    Its a short contract, so by they time HMRC catch up with you, you may well have gone perm and folded the company, or moved on to another client, so it would be hard for anyone to show you were under IR35 for this first contract.

  10. #10

    My post count is Majestic

    northernladuk has reached the peak. Play again?

    northernladuk's Avatar
    Join Date
    Mar 2009
    Posts
    43,308

    Default

    Quote Originally Posted by Joeman View Post
    If it was me i would go LTD and assume NOT under IR35.
    Its a short contract, so by they time HMRC catch up with you, you may well have gone perm and folded the company, or moved on to another client, so it would be hard for anyone to show you were under IR35 for this first contract.
    I disagree. The last thing you want to do on your first contract is getting yourself in all sorts of trouble you do not understand and cannot get yourself out of. Wing it when you know what you are doing, not before.

    I did Umbrella for the first 6 months and it didn't do any harm bar a little less money which is now totally irrelevant 4 years later.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •