Advice on taking on a one off contract.

[Mark555]

Hi all.

I have been a permanent employee for 25 years but have just been notified that I am to be made redundant at the end of the year. One of my old employers has offered me some sub-contract work. It is not worth a great deal of money, just over £3000 in total but there is the possibility of more work coming from them, but this is in no way guaranteed. I know absolutely nothing about how I would take on this contract. Is it worth starting a limited company for this small amount of money or should I go through an umbrella company? Any advice would be greatly appreciated.

Thanks in advance.

[BA to the Stars]

For a one off as you describe, you could do that as self employed and with no need for a limited.

If you are going to move into contracting for more work, then have a look at the first timer guides (see CUK Navigation opposite)

[pmeswani]

Hi all.

I have been a permanent employee for 25 years but have just been notified that I am to be made redundant at the end of the year. One of my old employers has offered me some sub-contract work. It is not worth a great deal of money, just over £3000 in total but there is the possibility of more work coming from them, but this is in no way guaranteed. I know absolutely nothing about how I would take on this contract. Is it worth starting a limited company for this small amount of money or should I go through an umbrella company? Any advice would be greatly appreciated.

Thanks in advance.

If you are ruling out the idea of being self employed, you would be better off going via an Umbrella, purely for the purpoose of IR35 protection. If you plan to go down the route of self employment, then all you need to do is invoice them without VAT. You will need to declare the income to HMRC when it comes to doing your self assessment.

The usual disclaimer... speak to an Accountant for a proper official advice.

[Crossroads]

The sensible approach would be to do this on a sole trader / self employed basis. Will your new client allow you to engage in this manner, or will they only deal with a Limited Company?

If you are going to have to go through an agency then self employed almost certainly will not be an option, and you will be looking at either a Brolly or setting up your own Ltd.

A Brolly will probably see you with around 50% of the £3k in your pocket, and no hassle.

You could set up a Ltd, run it for a year and close it down, probably end up with about the same in your pocket, but more hassle. Depends on the likelihood of more work I guess.

If you have been permie for 25 years, and then as soon as you are made redundant you are offered some freelance work is it reasonable to think this could be a regular thing? If so, you could look at this first piece of work as paying to set you & your company up longer term...

[Mark555]

Thanks for the advice guys. I have a feeling that the company will only deal with a limited company, but I am going in for a meeting tomorrow to discuss the contract, so will be able to find out some more info. Hopefully I will also be able to get an indication of any further work being forthcoming, in which case I think I will go the Limited company route.