Fairly urgent umbrella/Limited Co advice required

[richieboy]

Hello all. I really need to act on my problem tomorrow so I would need a bit of advice tonight if possible.

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I've done freelance IT work off my own back within the last year from my flat, but 4 weeks ago I tried doing some contractor work for a company in London (6 weeks long). I got some advice from an accountant and was told to set myself up as a Sole Trader as this would be the best for my circumstances (after the 6 weeks I will be going back and working part-time for a company I used to work full-time at, so I wont be a full-time freelance).

However when I got to London, I was told by the company that they only paid Ltd Companies and contractors working through umbrella companies. Bugger. So I found an umbrella company and thought all was ok. But I found out today that there has been a delay somewhere along the lines (no one is admitting who's at fault) and I'm not going to get paid for this umbrella's company 4 week payment cycle (this friday). This means I'll get paid mid December.

Well this isn't good enough as I've spent all my savings, nearly at the end of my overdraft, have to pay for my last London rent cheque, pay my mortgage back home and pay for a holiday I just booked. I may be able to call on some people to sort me out for a month, but I'm so annoyed that this has happened without me being told about the problem that I thought I might be able to do something different and say fob off to this umbrella company.

Could I just tell the company I am doing the work for that I am Limited Co and invoice them and then they will just give me a cheque or pay the money into my account. I can just set myself up later as a Limited Co as I was thinking of doing next year when I do more of these jobs. I know it's more work but I am pretty much going to have to do my own tax returns when I declare my freelance work I didn't do through an umbrella company.

So.....before I phone up people and ask for money, do you think the company will just pay me if I say I will set myself up as a Ltd co? What would the reasons be why they couldn't pay me?

Any other suggestions welcome

[DS23]

speak to your bank manager, explain the delay and extend your overdraft today. that will free you up to persue other options like going higher up the food chain in the umbrella company.

[WindyAnna]

By the time you have got yourself set up as a supplier on your clients system - with all the checks that entails - and then got your invoice processed through to payment it will be mid December anyway so I would make other arrangements.

Since you don't know where the hold up is then it is possible that it is your client who hasn't paid the umbrella anyway so there is no guarantee that they will pay you any quicker. You don't mention an agency so it sounds like it is client to pay umbrella to pay you.

So make other arrangements to borrow money and tell your umbrella you want an advance payment as soon as the money is received into their account.

[richieboy]

Cheers for the replies.

Yeah no agency was used here as the job was arranged through a colleague.

I was under the impression that it was possible to set up a ltd co quite quickly? Or is this just a newbie mistake?

Looks like I'll phone the bank manager first, then call in some favours if that fails

But just wondering, why do you think the company I am doing the work for can't just pay me as a sole trader? And insists on me being a Ltd co or going through an Umbrella? Is this standard practice?

[xoggoth]

Apply online for limited company today and you should have it in a few days. Only about 35 quid.

[DS23]

But just wondering, why do you think the company I am doing the work for can't just pay me as a sole trader? And insists on me being a Ltd co or going through an Umbrella? Is this standard practice?

i'm sure they could pay you if they really wanted to but most clients discourage this kind of thing because it creates extra workload to setup and manage. you could try and sweet talk the hr/payables people to slip you under the radar but unlikely to happen given your short tenure there.

[matey]

I'm not going to get paid for this umbrella's company 4 week payment cycle (this friday). This means I'll get paid mid December.

Not Parasol then.

[Money Money Money]

A lot of umbrella companies do same day payments now. So they will either BACS or CHAPS the money to your bank the day they receive it from the agency / client.

Try. LINK

HTH

[WindyAnna]

[QUOTE=richieboy;339603]I was under the impression that it was possible to set up a ltd co quite quickly? Or is this just a newbie mistake?
/[QUOTE]

It is - but once you have it you will still need to get your client to pay you - that's what will take the time

But just wondering, why do you think the company I am doing the work for can't just pay me as a sole trader? And insists on me being a Ltd co or going through an Umbrella? Is this standard practice?

It is fairly standard. Most companies now will have a policy both to limit the type of companies they deal with and to restrict the number of companies they deal with. As a result they tend to have a policy which excludes sole traders as it does leave them open to a number of issues, including potentially having to deduct tax from your invoice. Some companies won't even deal with smal Ltds (i.e. contractors companies) including the client I work for now and the last one - both insisted on putting any direct contractors via an agency!

[radapple]

I am going through Parasol, who, although good, may not be the ideal choice. I cannot really figure out whether an umbrella or a limited company is best. I feel your pain Richieboy!!!

Does anyone know where there is a comprehensive pros/cons list of the two?

And also, what type of accountant I would need for being limited? http://www.icaewfirms.co.uk/director...htype=taxation

Thanks,

Ianradapple.co.uk