First timer - urgent advice needed

[radish2008]

Hi

I started contracting about 6 weeks ago and originally intended to do it short term between jobs so I went through an umbrella. I've now got a 3 month extension on 250 a day and am now thinking of going limited. Cantractor Umbrella have advised me I can go with SJD Accountancy and they charge £95 a month. My questions are:

1. For 3 months is it worth going limited ? I fully intend to source other contracts if this one neds but here are good chances of future extensions here.

2. Is it worth setting up a limited myself and then just using an accountant to do the books ?

I've been on the web and have used a few calculators and with a ltd could clear an extra grand a month but am slightly worried that if I have to tear it down and only ever get 3 months work then it will cost me too much.

Any advice would be greatly appreciated, I'll need to decide before Monday on which way to go.

Cheers

Steve

[max]

Hi

I started contracting about 6 weeks ago and originally intended to do it short term between jobs so I went through an umbrella. I've now got a 3 month extension on 250 a day and am now thinking of going limited. Cantractor Umbrella have advised me I can go with SJD Accountancy and they charge £95 a month. My questions are:

1. For 3 months is it worth going limited ? I fully intend to source other contracts if this one neds but here are good chances of future extensions here.

2. Is it worth setting up a limited myself and then just using an accountant to do the books ?

I've been on the web and have used a few calculators and with a ltd could clear an extra grand a month but am slightly worried that if I have to tear it down and only ever get 3 months work then it will cost me too much.

Any advice would be greatly appreciated, I'll need to decide before Monday on which way to go.

Cheers

Steve

1. no, a lot of stuff will take months to set up. VAT/bank accounts etc.

2. always use an accountant in the early years. There's alot of lingo any self respecting IT person is never going to get.

Out of interest, do you have a permi job to go back to? You can keep moving it out?

[radish2008]

1. no, a lot of stuff will take months to set up. VAT/bank accounts etc.

2. always use an accountant in the early years. There's alot of lingo any self respecting IT person is never going to get.

Out of interest, do you have a permi job to go back to? You can keep moving it out?

hmmm. i thought you could set up in a few weeks ?

i had a permi job that i turned down to keep on contracting after i got the extension. the real query was is it worth setting up a ltd for what might be a three month contract.

[blacjac]

It takes a week or so to get the company incorporation certificate sorted, unless you buy an off the shelf company.
Once you have that, you can get a bak account opened the same day if you go to the right bank, we used HSBC.

However VAT registration can take anywhere from 1 week to 6 months, depending on how busy / lazy the VAT office is at the time.

[radish2008]

It takes a week or so to get the company incorporation certificate sorted, unless you buy an off the shelf company.
Once you have that, you can get a bak account opened the same day if you go to the right bank, we used HSBC.

However VAT registration can take anywhere from 1 week to 6 months, depending on how busy / lazy the VAT office is at the time.

right - thanks for that - i have applied already the bank that i've used for the past several years, although i haven't actually registered the company yet. SJD accounts can do it all for around £100 a month - i was thinking it might be better to let them handle it all ... thanks for the advice though ... i'm presuming you can still trade until the vat registration comes through ... ?

[TykeMerc]

From the tone of your post it looks like you aren't committed to being a contractor in the medium to long term, obviously contracting isn't for everyone.

For a 3 month period I wouldn't bother setting up a Ltd. At 250 a day I doubt the amount you would save after accountants fees would be worth the effort.

[Alfie]

A company can be set up within 24 hours, VAT registration can take as little as 10 days if it's done online, and a bank account will take about a week depending on where you go.

However, three months isn't worth it. Even with the benefits of flat rate VAT the accountancy charges will outweigh the profits given your daily rate.

If you're seriously going to carry on contracting after this current contract then it's worth considering. I would suggest you call an accountant and have a chat.

[Sausage Surprise]

right - thanks for that - i have applied already the bank that i've used for the past several years, although i haven't actually registered the company yet. SJD accounts can do it all for around £100 a month - i was thinking it might be better to let them handle it all ... thanks for the advice though ... i'm presuming you can still trade until the vat registration comes through ... ?

Nixon Williams £60 + VAT per month.

[victorantos]

too much

100 pound/month is too much!

it's only one or two contracts in 3 month period,
what has to do be done by an account company for 3*100=300 pounds? Register 2 contracts and some VAT???

Is it so complicated ?!

[Alfie]

100 pound/month is too much!

it's only one or two contracts in 3 month period,
what has to do be done by an account company for 3*100=300 pounds? Register 2 contracts and some VAT???

Is it so complicated ?!

Not quite that simplistic I'm afraid. It may only be three months of trading, but a full set of accounts and CT600 will still have to be prepared. Then there's advice on setting up the company, shares, VAT, dividends, wages, expenses, a tax return as a company director, CH annual return, advice on possible closure of the company, IR35 reviews, registered office service...

£100 a month is on the expensive side of the contractor specialist accountants, but it's far from unreasonable.