Another Umbrella vs Limited thread..!

[lambrini_socialist]

What is it with contractors today?

yeah yeah, and in the old days you had to type in all the zeroes and ones by hand, and when you ran out of ones you didn't complain, you just made do with all zeroes.

[original PM]

The one thing to remember is that when you go Ltd you need to ensure you have the relevant insurances in place

They are normally included in the Brollies monthly fee but they will almost definetly not be included in the accountants fees.

You should need
Employers Liability,
Public Liability
Profesional Indemnity

No idea what the cost of these per year is - I am sure someone on here could enlighten us.

You could obviously wing it and not get any insurances - but then that would not make you overly profesional would it??

[Jubber]

£35,000 p/a

At that rate I would be looking to go permie and all the benefits that would go with it.

If you want to start your own business, go with the Ltd. If you just need a payroll, go with Parasol.

J

[lambrini_socialist]

If you want to start your own business, go with the Ltd. If you just need a payroll, go with Parasol.

J

nice. that, to me, is the key difference. i wouldn't be starting a company if it was nothing more than a tax vehicle while i continue to live, work and think like an employee.

[newcontractor08]

Thanks very much everyone. Some fantastic advice, I'd have thought everyone was sick of answering this question so it's much appreciated!

Were I confident that I was going to be in a contract role for the foreseeable future, I would certainly go with the Ltd option after having read your input. However, it was suggested to me that there was a good chance of the role becoming permanent - the contract status being portrayed as kind of a formality - almost a prohibitory (is that the word?) period. It's a big company and this is their standard practice with new web developers so I'm not worried that anything dodgy is going on! I'm kind of indifferent, although were I offered it as a permanent role I'd likely take that and the benefits that come with it vs. contract status. Don't have the choice at the second though, just pleased to have got the job

So, bearing in mind that there's a good chance of it becoming a permanent role within the year if I want it to, umbrella co. does seem an easier way to go, although you pointing out the use of the world "could" pisses me off a bit!

A couple more Q's if I may:

1) How easy/difficult is it to change from umbrella co. to limited at any point in the contract, if I do get a taste for the contract lifestyle? Any advice on doing so?

2) I can't be too sure about the IR35 thing, you're right - the only benefits I'd receive are 14 days holiday + bank holidays - I was told by another contractor there that I'd need to get a solicitor involved to make sure the contract was drafted outside of IR35. Say it were to fall inside IR35, am I right to assume that with a "low" (yeah, it seems high to me, lol) value contract, the "take home" amount will be pretty similar with doing it Ltd inside IR35 vs umbrella company?

So much to think about! If a permanent role were on offer, I'd probably just go for that at this point, but hey it's all fun and games and either way I'll be better off than I am now

Cheers

[NotAllThere]

yeah yeah, and in the old days you had to type in all the zeroes and ones by hand, and when you ran out of ones you didn't complain, you just made do with all zeroes.

Zeroes? We dreamed of having zeroes. No, we 'ad to move the electrons between the plate and the filaments by hand... etc. ad nauseum.

[Archangel]

the only benefits I'd receive are 14 days holiday + bank holidays

Paid holidays?????? Are you sure this is a contract, and not temporary employment (where they also pay your tax & NI)

[newcontractor08]

Yeah, I thought that was weird, but from the job ad:

"This role is to work for --- via their Managed Service Provider, ---. As such, the successful candidate's contract will be with --- and not ---, i.e. ---will view the candidate as a contractor and he/she will not be eligible for any benefits afforded to permanent --- employees. The higher salary reflects contract status, which is to cover lost daily wages as a consequence of time lost due to holidays, bank holidays and time off through illness. 14 days holiday allowance has been written into the contract due to it's long duration. Any further holiday will result in a loss of wages for the duration of the holiday." (I don't know why I feel the need to blank out the company name )

The manager explained that he gives contractors 14 days holiday because otherwise they are loathe to take holidays at all, and he believes they end up actually performing worse through having not taken a break/coming in when ill/whatever. Does this make sense? But I agree it does seem quite close to employment, so IR35 could well be an issue.

I'm thinking I'll just go with Parasol for now then a bit down the line once I've got a better understanding of how things work, I can reconsider... Does this sound reasonable?

Cheers for the help

[SueEllen]

Paid holidays?????? Are you sure this is a contract, and not temporary employment (where they also pay your tax & NI)

Have to agree.

If there is any mention of paid holidays then it's not a contract for services and it'stemporary employment. This means that you should be on someone's payroll either the agency's or the company that is employing you.