Considering bankruptcy as a contractor

[Adecco]

I may need to go bankrupt soon. I currently am an IT contractor and a director of my own limited company.

As a condition of bankruptcy I am unable to be a director of a company.

If I set up a fixed term contract instead with my employer, does that also involve being a director ? Or what is my starus in that scenario ? An employee of the employer ?

[TykeMerc]

That would entirely depend on the contract.

It's quite possible for the contract to be anywhere from what's basically an employment one to a pure business to business arrangement with payment at the end and anywhere in between.

It's all in what you negotiate, agree and sign up to.

[Scruff]

You need to seriously consider "going bankrupt" as a contractor. Is it because you have used all the Company's cash and can't pay taxes due? No need to answer that question here, but I would take counsel from your Accountant and Lawyer first?

[eek]

You need to seriously consider "going bankrupt" as a contractor. Is it because you have used all the Company's cash and can't pay taxes due? No need to answer that question here, but I would take counsel from your Accountant and Lawyer first?

I don't think anything above is true. The cause of the problem is revealed in his very first post on this forum and I can see why bankruptcy is a possibility and he is merely the first of what is going to be a lot of contractors.

[malvolio]

I don't think anything above is true. The cause of the problem is revealed in his very first post on this forum and I can see why bankruptcy is a possibility and he is merely the first of what is going to be a lot of contractors.

He also says he's in banking and ideally wants to get into the IB market. Well that's not going to happen now, is it? Permiedom is probably the only option and even then he may fail vetting if he's a declared bankrupt.

To answer the OP's original question, a fixed term contract is one of employment but with a known end date and no option for redundancy or extension. You get paid as an employee on roughly their salary level under normal PAYE. OTOH you do get holiday and sick pay, and potentially pensions contributions.

It may be a valuable stopgap, but you have to start thinking longer term.

[BlasterBates]

Why not just go through a brolly.

[MarillionFan]

I may need to go bankrupt soon. I currently am an IT contractor and a director of my own limited company.

As a condition of bankruptcy I am unable to be a director of a company.

If I set up a fixed term contract instead with my employer, does that also involve being a director ? Or what is my starus in that scenario ? An employee of the employer ?

You're not the Recruitment company Adecco by any chance?

[Ebenezer]

Looking back at your history, I think you might be focusing excessively on bankruptcy at the expense of other options.

If the total amount of loans you received is in the order of 100K, surely the tax even in worst case scenarios would come to around 60K?

Leaving aside the question of how you find yourself unable to put your hand on 60K after a decade of contracting, I would have thought it isn't too late to start saving now?

The unraveling of these schemes seems to be a multi-year process, working in financial services (which will be difficult and/or impossible in the event of you going bankrupt) you should be able to amass a sizeable amount of money in a relatively short space of time.

On the upside, in the event of HMRC losing the battle, you'll be able to buy an M5 with the money instead.

[TheFaQQer]

Why not just go through a brolly.

That sounds like the simplest idea to me.