One-off six month contract - umbrella or limited?

[applegrass]

Hello! Newbie here! *waves*

I'm about to embark on my first six-month contract, as found via an agency. They've suggested I either go down the umbrella route (with Giant) or a limited company route.

As I understand it, forming my own limited company would earn me a little more money for a bit more admin hassle, which I'm willing to do. But if the contract is only going to be for six months - and I have no idea whether I'll find another contract afterwards - which is better? Limited or umbrella?

Many thanks for your help!

Andrew

[Archangel]

Hello! Newbie here! *waves*

I'm about to embark on my first six-month contract, as found via an agency. They've suggested I either go down the umbrella route (with Giant) or a limited company route.

As I understand it, forming my own limited company would earn me a little more money for a bit more admin hassle, which I'm willing to do. But if the contract is only going to be for six months - and I have no idea whether I'll find another contract afterwards - which is better? Limited or umbrella?

Many thanks for your help!

Andrew

Why not have a look at the "sticky" above entitled "ltd company or umbrella" to start with?


Or the "LTD vs Umbrella" thread in the "business / contracts" forum.

[applegrass]

I have done.. and they all basically say 'Go limited unless you have a short-term contract'.

The question is, for my mind, how short is short ?!

[sidknows]

bear in mind that if its a one off contract , you should not be claiming any travel expenses

[TheFaQQer]

If you're likely to contract again, then go Ltd.

If you're not going to contract again, then umbrella.

[LisaContractorUmbrella]

For a short term contract an umbrella company would make more sense for you but, beyond that, if you decide to become a career contractor and don't mind the paperwork a Limited Company would be the way forward.

As Sidknows said, if you are only intending to do this one contract between permie jobs you will not be able to claim travel expenses. The reason for this is that travel is only allowable for temporary assignments. The umbrella company would be your employer and, if you only intend to have one contract through them, your place of work would become permanent by default, however short the contract. In order for travel expenses to be claimed through an umbrella company there has to be the intention of contracting at more than one location.

HTH

[KevinS]

In order for travel expenses to be claimed through an umbrella company there has to be the intention of contracting at more than one location.

HTH

And how does one prove 'intention'??

Not having a dig at you, but it should be a bit more definitive.. I could argue that I intended to continue contracting but couldn't find another contract, so went back to permiedom..

[Hex]

Even for 6 months, I'd go Limited. Who knows, you may go on for longer. If you're outside IR35 then you'll take home a lot more, even if you're inside you may well be better off - it would depend on your daily rate and how much your accountant charged.

You need to understand the figures first. Do you know if you'll be inside or outside IR35?

[applegrass]

You need to understand the figures first. Do you know if you'll be inside or outside IR35?

I'd be inside IR35, on £50 per hour / £400 per day.

I live in Manchester, but the office is in Nottingham (100 miles away) so I'd have to take temporary accomodation in Nottingham (be it a hotel, b&b or whatever). Would I still be able to claim accomodation or travel expenses?

[SueEllen]

And how does one prove 'intention'??

.

By having a legal argument with HMRC.