Currently a sole trader agent says I need to operate through a umbrella or ltd co.

[pixelscript]

Hi,

I'm a complete noob at this. In the past I've just written contracts for clients and it's been easy. This is my first time operating though an agent. I don't really understand why I have to go this route other than it's something to do with gov regulation.

This is the email he sent me:

As mentioned you will need to either go through a umbrella or limited company.

The four on our PSL are:
Paystream
Giant
Lesters
Orange Genie.

I would recommend Paystream to help you set up a limited company or Giant for an umbrella.

Looking at Paystream it seems like thay will be taking around £160 a week for their services which seems a bit steep. Plus a lot of people on here don't seem to like them. Does anyone have an idea what my options are?

[SueEllen]

How long are you likely to be a contractor for?

If it's going to be a while then you may as well set up a limited company. Have a read of "Limited Companies" under CUK navigation on the right ->

Also have a search here for a contractor "accountant" They charge less then what paystream seem to charge a week a month.

Yes you will have to do more paper work but then there are tax benefits to working this way. Also your accountant doesn't have to be situation anywhere near where you live as you can deal with them by email, phone, post and fax.

[malvolio]

The problem is snappily entitled S44-47 IETPA 2003....

This is the law that says that should you default on your taxes, the debt falls on the next "person" up the chain, which in your case would be the agency. They aren't going to take that risk, so they insist on an intermediate company between you and them; your own or an umbrella doesn't matter. It also explains why we have IR35 and a long list of other equally rubbishy situations, but we're kind of stuck with it.

As Sue Ellen says, there are commercial benefits to using your own company if this is going to be long-term plan. Get hold of one of the accountants that post on here and have a chat.

[keninparis]

The problem is snappily entitled S44-47 IETPA 2003....

This is the law that says that should you default on your taxes, the debt falls on the next "person" up the chain, which in your case would be the agency. They aren't going to take that risk, so they insist on an intermediate company between you and them; your own or an umbrella doesn't matter. It also explains why we have IR35 and a long list of other equally rubbishy situations, but we're kind of stuck with it.

As Sue Ellen says, there are commercial benefits to using your own company if this is going to be long-term plan. Get hold of one of the accountants that post on here and have a chat.

I went through an umbrella company for the 1st year and a bit so I could get my head around the ltd. co. side of things. All depends on your situation. Good luck.

[pixelscript]

Thanks for your advice guys.

How long are you likely to be a contractor for?

That's difficult to judge, this contract will only be for 3 months and I don't know how often they will come around.

It sounds like the umbrella route will be easier, but the ltd route my be better in the long run. I also want to create some patents in future and would prefer them in the name of a ltd.

I will speak to an accountant and see what they say.

[LisaContractorUmbrella]

Thanks for your advice guys.



That's difficult to judge, this contract will only be for 3 months and I don't know how often they will come around.

It sounds like the umbrella route will be easier, but the ltd route my be better in the long run. I also want to create some patents in future and would prefer them in the name of a ltd.

I will speak to an accountant and see what they say.

In these circumstances you would be better off with an umbrella company until you have confirmation of another contract or an extension; setting up (and possibly closing down) a Ltd Co for a 3 month contract would really not be worth it

[keninparis]

Thanks for your advice guys.



That's difficult to judge, this contract will only be for 3 months and I don't know how often they will come around.

It sounds like the umbrella route will be easier, but the ltd route my be better in the long run. I also want to create some patents in future and would prefer them in the name of a ltd.

I will speak to an accountant and see what they say.

Go with an umbrella, IMO, as it takes a while to get to grips with the ltd. co. set-up. So you'll lose a few quid but an easier time of things. In the long term set up a ltd. co. Spend time at work researching this further. Bon chance.

[malvolio]

Go with an umbrella, IMO, as it takes a while to get to grips with the ltd. co. set-up. So you'll lose a few quid but an easier time of things. In the long term set up a ltd. co. Spend time at work researching this further. Bon chance.

Depends how much you like giving away 20% of your net take-home really, doesn't it, itf you already have a workling business... "Having an easy life" is a piss-poor commercial justification.

[LisaContractorUmbrella]

Depends how much you like giving away 20% of your net take-home really, doesn't it, itf you already have a workling business... "Having an easy life" is a piss-poor commercial justification.

And you arrive at that figure............................................ ...........????

[keninparis]

Depends how much you like giving away 20% of your net take-home really, doesn't it, itf you already have a workling business... "Having an easy life" is a piss-poor commercial justification.

I wasn't commenting on commercial justification (I have a ltd. co.) - just trying to help.