Should I trade as a Limited Company, umbrella or composite

[Foresight One]

Dear all

There are still compliant solutions out there for contractors working in the UK. If you are serious about looking for an advisor then please contact me by PM (chrism@foresightone.co.uk) and I would be happy to discuss various solutions based on your circumstances.

[brobi]

Originally Posted by Foresight One

Dear all

There are still compliant solutions out there for contractors working in the UK. If you are serious about looking for an advisor then please contact me by PM (chrism@foresightone.co.uk) and I would be happy to discuss various solutions based on your circumstances.

and none of them involve 95% of the accountantcy firms in the UK. Foresightone included! Well they don't even have a website any more! Unless they never did...

My accountant can help any of you! You will save loads of money! Under umbrella and PSC's I would pay £500 - £600 per week in taxes. This method I pay that in one month!

[offshore junkie]

Originally Posted by brobi

and none of them involve 95% of the accountantcy firms in the UK. Foresightone included! Well they don't even have a website any more! Unless they never did...

My accountant can help any of you! You will save loads of money! Under umbrella and PSC's I would pay £500 - £600 per week in taxes. This method I pay that in one month!

brobi do you do any offshore mitigation? I have just started contracting and need a good accountant. Would it be possible to have their details please?

[D7V]

Ltd is the only way to go.
If you have risk then you're clear.
Here's risk - I spend £3k learning to speak French to get a Paris contract - I don't get a Paris contract - my Ltd company has lost £3K.
Net result is I always wanted to learn French and I got to do so at the expense of my Ltd Company. Boat yard salesmen in Nice like it when you speak French and gave me £3K off my boat!

[M@H]

HI, 1st post. (not spam! )

I have been contracting for some 3 years and left it in Dec 2006 for a bit of a break. Before I was with a "scheme" which is now no longer available, and now having come back inot contracting this month, have realised that PAYE is going to be disasterous so will be setting up a Ltd co. My quiestion is 2fold:

1st: I don't need all of my income as "salary" at all and would quite like to build up some sort of investment within the company (a land bank or something), can I simply spend the company money on long term investments, then sit back and see what happens.?

2nd: is there a good way to make these "purchases" to enable me to be tax efficient about reaping reward on them later? (charitable trust within the company..? sell at a loss back to myself in future ? pay tax up front, rather than later on..?)

Many thanks,
Matt H.

[kieranr]

Originally Posted by simonsjdaccountancy

Hi everyone,
Inside IR35

If you fall inside IR35 then the tax payable via an umbrella or composite Company will be around the same. There will be a saving of around 5% if you operate through your own Limited Company.

Hope this helps, and feel free to add anything else you think useful.

Does this mean that I make 5% more of my gross, or 5% more of my net that I would get through an umbrella.

How much extra time per week do people find that it takes to do a ltd company than an umbrella?

Thanks, Kieran

[vhadiant]

Originally Posted by kieranr

How much extra time per week do people find that it takes to do a ltd company than an umbrella?

Almost negligible. I used to be with an umbrella company (Parasol) until May 2007. At that time, my visa doesn't allow me to setup a limited company, now that I have HSMP I have my own Ltd Co.

Yes it does a bit more overhead, but if you use a company formation agent like Nixon Williams or SJD they'll do everything for you. There will be some backward & forward snail mails for signatures but that's it.

Every month I still have to do your timesheet, invoices just like when I'm with umbrella company. The only difference now that I have my Ltd Co I have to raise invoice myself, send the invoice to the agency and monitor the incoming payment.

Fax the invoice, expenses to my accountant, they figure out how much salary I can take out & expenses. Then transfer the money out myself.

To take money as dividend simply fax the dividend payment request to the accountant, then transfer the money myself.

I think the above extra steps worth the extra few thousands take home that you will get rather than having the Umbrella company.

[MarkW]

Lots of potentially good information in this thread, I say potentially as most of it I do not get!

First time contractor looking to sign a contract on Mon/Tues next week, so a bit stuck for time.

Can anyone give me an idea as to how much it cost to register a Ltd Co. and how quickly can it be done? I am guessing one of the longest things could be registering for tax?

I like the table on the first page, however, does the ltd co. row take into account any accountancy fees or setup fees?

Seriously tempted by an Umbrella company (have had parasol and JSA recommended to me) due to the speed of setup.

One other question, I am in rented accomodation at the moment, have a feeling that I would not want to register the company to this address. I would not want to rent a physical office, so what would be the best way of registering the company?

Typical noob questions no doubt, but very relevant to the subect of this thread, so thought it would be best to start here!

[sathyaram_s]

If you have one week to sort things out, then limited company is the best bet, IMHO .. IR35 inside or outside doesn't matter ...

VAT registration takes a couple of months, which hardly has any impact ...

You can get you company setup in less than half-a-day if you use online setup .. It costs anywhere between 50 - 150 pounds depending on the provider you use ... Go for a provider you are comfortable with .. Remember, this is a tax-deductable one time expense, and therefore getting it right is more important than saving a few quids.

Make sure you check your contract for IR35 and try to get it ouside ..

Accountancy fees is anywhere between 600 and 1500 pa. You should find a number of recommendations for accountants in the fora .. It is advisable to go with an accountant who has knowledge in contracting affairs. Some prefer to have an accountant local to them while others are happy with the telephone and email service provided by some accountants .. As a first time contractor, it is better to use the services of an accountant.

I use my accountant's address for regd office and pay £150 per annum for the service. Some accountant's annual fee includes this service. And you can use your home address or virtual office services ( who collect your post and forward to your address . eg. http://www.londonpresence.com/ ) as 'Address for Communication'

Originally Posted by MarkW

Lots of potentially good information in this thread, I say potentially as most of it I do not get!

First time contractor looking to sign a contract on Mon/Tues next week, so a bit stuck for time.

Can anyone give me an idea as to how much it cost to register a Ltd Co. and how quickly can it be done? I am guessing one of the longest things could be registering for tax?

I like the table on the first page, however, does the ltd co. row take into account any accountancy fees or setup fees?

Seriously tempted by an Umbrella company (have had parasol and JSA recommended to me) due to the speed of setup.

One other question, I am in rented accomodation at the moment, have a feeling that I would not want to register the company to this address. I would not want to rent a physical office, so what would be the best way of registering the company?

Typical noob questions no doubt, but very relevant to the subect of this thread, so thought it would be best to start here!

[MarkW]

Sorry, when I say next Mon/Tues, I mean tomorrow!