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Help please, best to go limited? No idea, please help.

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    Help please, best to go limited? No idea, please help.

    Hi there, I'm hoping someone can take the time to help us.

    My husband is contracting at the moment and has been offered work via an agency ( already In 2nd week) he also had to sign up to be paid via an umbrella company at the same time, they said they couldn't pay him directly as a self employed person?

    He won't be paid until the 3rd week of employment as apparently they keep 2 weeks back incase he doesn't show is that standard practice? He will then be paid weekly but they will always have that first 2 weeks worth of wages held back.
    The employment contract is for 3 months

    They called him yesterday and said he would be paying 2 lots of NI, it seems like it's quite common after a Google search but not sure whether setting up as a limited company would be better?
    Some other people he was working with said that they are set up as a limited company and don't pay what he is and they paid around £13 to set up as limited.

    As I said I have absolutely no idea or understand any of it, I just don't want him doing something and not knowing the pitfuls. He's on a good wage but they seem to be taking a big cut of it, plus holding back 2 weeks has been tough on us financially.

    I have tried googling but I really struggle to get my head around it all and make sense of it as so many people seem to say conflicting information.

    We spoke to his dad's accountant he once said going limited wouldn't be worth it as he would have to pay out a few hundred but today said it may be the way to go? Argh.

    #2
    Originally posted by Jm90 View Post
    Hi there, I'm hoping someone can take the time to help us.

    My husband is contracting at the moment and has been offered work via an agency ( already In 2nd week) he also had to sign up to be paid via an umbrella company at the same time, they said they couldn't pay him directly as a self employed person?

    He won't be paid until the 3rd week of employment as apparently they keep 2 weeks back incase he doesn't show is that standard practice? He will then be paid weekly but they will always have that first 2 weeks worth of wages held back.
    The employment contract is for 3 months

    They called him yesterday and said he would be paying 2 lots of NI, it seems like it's quite common after a Google search but not sure whether setting up as a limited company would be better?
    Some other people he was working with said that they are set up as a limited company and don't pay what he is and they paid around £13 to set up as limited.

    As I said I have absolutely no idea or understand any of it, I just don't want him doing something and not knowing the pitfuls. He's on a good wage but they seem to be taking a big cut of it, plus holding back 2 weeks has been tough on us financially.

    I have tried googling but I really struggle to get my head around it all and make sense of it as so many people seem to say conflicting information.

    We spoke to his dad's accountant he once said going limited wouldn't be worth it as he would have to pay out a few hundred but today said it may be the way to go? Argh.
    He has already made a large pitfall of starting work without knowing how he will get paid.

    Is he an IT contractor? If he is, is he working for a Public Sector organisation? http://forums.contractoruk.com/publi...bout-ir35.html

    And this thread to help with choosing an umbrella (if that's what you decide to do)
    http://forums.contractoruk.com/publi...-umbrella.html

    Those 2 questions will let us know how best to advise you.

    In the meantime take a look at this thread (to understand the background)
    "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
    - Voltaire/Benjamin Franklin/Anne Frank...

    Comment


      #3
      Also, what is the potential length of any future engagement?

      If he is only contracting for three months then it may not be worth considering a limited company for that short a period in any case. If he is looking at contracting for a longer period then the questions already posed are relevant and would need to be answered before being advised accurately.

      Comment


        #4
        Why isn't your husband posting the question? You mention employment and other non contractor terms so difficult to give succinct advice when the information being presented is incorrect.
        'CUK forum personality of 2011 - Winner - Yes really!!!!

        Comment


          #5
          Originally posted by Jm90 View Post
          holding back 2 weeks has been tough on us financially.
          Imagine how hard it will be at the end of the contract and after those two weeks gets paid you have no income for another six weeks because he can't find a new contract or he finds one with a monthly payment.

          Start saving now for that rainy day.
          Best Forum Advisor 2014
          Work in the public sector? You can read my FAQ here
          Click here to get 15% off your first year's IPSE membership

          Comment


            #6
            There are, as I'm sure you are beginning to see, lot's of variables that need to be considered when deciding the best vehicle for performing services as a freelance worker.

            It would definitely be a good starting point to have your husband discuss the particulars of his situation with a contractor specialist accountant who can help him make the best decision for him and your family.

            At least then he could decide whether to use an Umbrella solution or a limited company with the knowledge that he had fully investigated his options and the potential impacts.

            Comment


              #7
              Originally posted by northernladuk View Post
              Why isn't your husband posting the question? You mention employment and other non contractor terms so difficult to give succinct advice when the information being presented is incorrect.
              ^^^ This.

              When your husband comes back from work tell him to log in and to give full details so he can be pointed to the right help. You giving an incomplete picture means it is not possible for people to give the right advice.
              "You’re just a bad memory who doesn’t know when to go away" JR

              Comment


                #8
                I guess it will boil down to how long in is likely to be contracting, if it is foreseeable future then I would suggest looking into a limited company. Your husband must be a very busy man...

                Comment


                  #9
                  I will get him to put a post up shortly. He's been working nights so thought I would ask a few questions but like I say and you can guess I don't know what I'm talking about.

                  He will update shortly and hopefully can advise on the best way forward.

                  We have a young family and recently had a baby so need to sort this asap. He was working full time for a company up until recently so this is all very different and new.

                  Thank you

                  Comment


                    #10
                    Originally posted by Jm90 View Post
                    Hi there, I'm hoping someone can take the time to help us.

                    My husband is contracting at the moment and has been offered work via an agency ( already In 2nd week) he also had to sign up to be paid via an umbrella company at the same time, they said they couldn't pay him directly as a self employed person?

                    He won't be paid until the 3rd week of employment as apparently they keep 2 weeks back incase he doesn't show is that standard practice? He will then be paid weekly but they will always have that first 2 weeks worth of wages held back.
                    The employment contract is for 3 months
                    Without repeating too much of what everyone else has said, your husband should have been clear on the payment terms. So if I look at a scenario, if your husband is on a weekly invoicing, then I would expect he works a week, submits a timesheet and the agency pays "normally" on 7 day payment terms, so you would most likely receive payment 2 weeks from when he started. If it is monthly, he could be waiting 2 months for the first payment, so work one month, submit timesheet and payment terms from the agency of 28 days!

                    Never heard of a company holding back payments, that just sounds odd

                    Comment

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