Limited Company Question

[ukmercenary]

So I have been offered a 5 month contract starting January, they said the role is likely to be outside ir35 until April when it will turn inside.
I currently use an umbrella company. I am thinking is it worth me opening a limited company for the first 3 months ?

If I put it into 4 well known umbrella company websites the difference monthly pay between limited and umbrella is very different.

Contractor Umbrella: £500 more via limited
Paystream: 768 more via limited
Parasol: 511

Assuming on a very basic level most limited companies cost £100 a month to run and need to be run for a minimum of a year fees can be assumed to be £1200, so I assume the extra £1500 extra income I would get from the first 3 months of the contract not worthwhile? However I can't claim an expenses via an umberalla and my train fairs will be £600 a month but I can claim these via a limited what are peoples thoughts?

[eek]

So I have been offered a 5 month contract starting January, they said the role is likely to be outside ir35 until April when it will turn inside.
I currently use an umbrella company. I am thinking is it worth me opening a limited company for the first 3 months ?

If I put it into 4 well known umbrella company websites the difference monthly pay between limited and umbrella is very different.

Contractor Umbrella: £500 more via limited
Paystream: 768 more via limited
Parasol: 511

Assuming on a very basic level most limited companies cost £100 a month to run and need to be run for a minimum of a year fees can be assumed to be £1200, so I assume the extra £1500 extra income I would get from the first 3 months of the contract not worthwhile? However I can't claim an expenses via an umberalla and my train fairs will be £600 a month but I can claim these via a limited what are peoples thoughts?

The contract is inside and you know that it is so why do you think you can use a limited company and claim expenses.

[northernladuk]

The contract is inside and you know that it is so why do you think you can use a limited company and claim expenses.

This. Nothing else to it.

You really need to understand the IR35 situation better. We've been here three times now and every contractor bar none should now be able to see what is wrong with the statement 'its outside now but going inside in April'. If you don't you need to catch up very quickly.

[cojak]

No, I'm afraid that it isn't worth it for the 3 months till April. It will be more hassle than it's worth (literally).

Stick with your umbrella.

[ukmercenary]

This. Nothing else to it.

You really need to understand the IR35 situation better. We've been here three times now and every contractor bar none should now be able to see what is wrong with the statement 'its outside now but going inside in April'. If you don't you need to catch up very quickly.

Agreed I need to catchup with ir35 so will make that my next step.Thanks

[ukmercenary]

No, I'm afraid that it isn't worth it for the 3 months till April. It will be more hassle than it's worth (literally).

Stick with your umbrella.

, thanks

[ukmercenary]

The contract is inside and you know that it is so why do you think you can use a limited company and claim expenses.

Probably because the the agency said it was inside for the first 3 months. But I admit I need to try to understand ir35 better.

[jayn200]

Not worth it. You are incurring additional expenses related to the Ltd company that will probably total 1000+ (assuming you use an accountant) you're lucky if you end up netting any money. Plus on top of that you are running the risk of future tax liability on those 3 months.

Hard to say specifically without seeing fully set of numbers but if I had to just make a guess based on what you have provided so far I'd say your best case scenario is maybe a 500-1000 gain vs worst case of losing 4000-5000. Add on hassle of opening a Ltd then closing it down in 3 months just to operate a new way, it just doesn't make any sense to do it.

[Lance]

Probably because the the agency said it was inside for the first 3 months. But I admit I need to try to understand ir35 better.

not really. Take this through an umbrella. Come April, IR35 is unlikely to ever be your problem again so I wouldn't bother learning it.
Unless you have any aspirations of running a real business in the future of course.

[ukmercenary]

not really. Take this through an umbrella. Come April, IR35 is unlikely to ever be your problem again so I wouldn't bother learning it.
Unless you have any aspirations of running a real business in the future of course.

ok yes that sounds best advice I shall just stick to umbrella !
I have run a PC repair company before in my spare time but probably not worth the hassle these days.