Contracting through Composite Company (first timer)

**Mordac** · 1 November 2006, 14:36

Best advice I can give you is: Avoid Giant and JSA like the plague. Go with Parasol for a few months while you find your feet, then if you think you will stick it out, start a ltd company.

**DaveB** · 1 November 2006, 14:38

Contractor Umbrella also get favorable comments on here.

**Mordac** · 1 November 2006, 14:41

Yes, sorry, in my haste to warn you away from Giant & JSA, I forgot to mention them.

**Robot** · 1 November 2006, 14:44

“Now it is a 16 week contract and I honestly couldn't say whether or not I will continue contracting after this one”

“They had all the answers but they said that the only expenses i could claim were travel and subsistence”

Can you really claim your travel and subsistence ?

From another thread (Umbrella Sticky !)

And it's also necessary to add: If you only do one placement through any one umbrella, there is a (noticable) risk that the revenue might consider you are *not* a 'worker temporarily working at a remote site' at all and disallow all expenses.

**shippwreck** · 1 November 2006, 14:47

Hi,

I understand why you say avoid Giant as they seemed a bit fishy... even to a novice like me...but why avoid JSA... i'm going to give Parasol and umbrella a call to see what they say, but i was wondering why you were saying avoid JSA as they seemed very proffesional. They were doing things like checking the contract was IR35 compliant and requiring receipts for everything (bar mileage).

Please don't get me wrong... you guys have a lot more experience than me with these things and I acknowledge that... i was just wondering what the reasoning behind the statement was ... if you know what i mean.

**malvolio** · 1 November 2006, 14:54

Rumour has it that JSA are stright but just not very efficient: that can be worse than them being, ermm, "bent" shall we say, if you miss a deadline or they screw up your payments. I don't know, I don't use umbrellas, but there are enough examples quoted on this board to make you wonder.

Also do not ignore PCG's QU umbrella, which is run by Parasol. That is one that will definitely not rip you off, and yo get free PCG membership thrown in (or vice versa, depending on your point of view...). Parasol and CU are also entirely straight with their clients.

Do not rely on HMRC's advice about anything: theior advice on IR35 is actually wrong anyway. Read the real first time guides here and on www.pcg.org.uk and understand them. Do not use a composite, you don't yet know enough to make a judgement.

Read the threads about expenses all over the forums here, but the rule is if you don't spend it, don't claim it. We don't pay you to go to work or eat out.

And good luck - welcome to the real world.

**shippwreck** · 1 November 2006, 15:11

Originally posted by malvolio

And good luck - welcome to the real world.

LOL, don't i know it... my head is hurting from all this research!

As for expenses... yeah i completely agree, i think it was my Father that told me that in his opinion people that have large subsistence expenses but no reciepts are just waving a bright red flag to the IR and asking to be investigated... plus it just doesn't feel right to claim something your not actually getting... you know!

I'll ask about PCG's QU umbrella when i ring Parasol...

Thanks again

**shippwreck** · 1 November 2006, 15:58

Ok... after doing ALOT of reading this afternoon... i have come to the conclusion that composites are... well... risky to say the least. From what i have been reading they will be targeted in the future and even if the contract itself appears to be outside of IR35 the fact that your operating through a composite goes heavily against you in those cases and you leave yourself wide open to risk.

So this leads me to Umbrellas... which haven't been coming out as particulary good in terms of net to gross ratio... which makes me think that having my own limited company would be best... even if i did only have the one 16 week contract!

So that brings me to a meeting i had yesterday with a guy from First Option. He said that they were an accountancy firm that only deal with limited companies. He said that for £25 per week they setup the company and act as your accountant. You have full control over everything and keep all receipts etc... You get all the Tax benefits and they will look over your contract to give their opinion on IR35 compliancy, or for £90 they can get a lawyers firm to ok it. At the time it seemed like a lot of work for what might only be 16 weeks... but now it seems like it would be the safest way against IR35 failings and probably most profitable way too. They don't charge to setup or close down your limited company but there is a 6 month tie in... all though he said if you ceased trading before that tie in the weekly fee would reduce to £5 which would mean at worst that would be an extra £40 down the drain.

Now i acknowledge that you don't need an accountancy to manage your own business... you just need one to check the books at the end of the year... but these guys also set up the business for free (that's around a £200 saving, am i right?) and ensure it is all above board and payments are made correctly which would seem like a sensible precaution for a first timer!

So i guess my next question would be have you heard of First Option and do you have any warnings about them???

Oh he also said that he advised i pay myself a sensible wage that i could live off and pay dividends to myself quarterly as technically your not supposed to live off dividends and that makes it look better to the Tax Man... Now thats fine as my wife earns almost enough on her own to cover mortgage and bills etc so all i would really need is the minimum wage, but it sounded like a sensible precaution.

**Spacecadet** · 1 November 2006, 16:09

Try SJD

costs about £25pw (actually £75 per month + VAT) and they are very good

Contracting through Composite Company (first timer)