• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.

Umbrella or Ltd, 2 income streams.

Collapse
X
Collapse
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    Umbrella or Ltd, 2 income streams.

    Hello All

    Having moved from contract to perm a few years ago it looks like I may be going the other way again. I used to work through my own Ltd but wound that up a couple of years ago. In light of the the changes tio IR35 coming and other rumblings from HMRC (Corporation Tax increases etc) would you consider going Ltd again (a brief inputting of the numbers in a couple of the calculators out there shows Ltd to be around 700 quid a month more compared to Umbrella). This issue is also compounded by the fact that I willl also be doing some part time work at the weekend for another client (again on a daily rate) so I will be having 2 sources of income coming in, this part time may be a bit sporadic and on and off over the year (I may be able to get this ad-hoc work paid out on a sole trader basis but its TBD at the moment). What are peoples thoughts on this? (Thanks for your input in advance).

    #2
    What do you mean "may be going the other way again".

    Do you mean you're leaving perm employment and are going to look for contract work, or do you already have a contract lined up. If the latter, will it be outside or inside IR35 come April. Have you reviewed the market (for your skillset) to determine whether there will be (m)any outside IR35 contracts that make it viable to go down the Ltd route?

    Unless you have a particular niche skill that means clients will take the risk of outside IR35 contracts, or you already have an confirmed (after April) IR35 contract, I can't see the point of forming a new Ltd as of now.

    Unless the second role is bringing in more than pocket money, i'd not let that influence your decision. eg, would it even cover the overheads of running a Ltd company if your "main" contract was Umbrella or inside IR35?
    Last edited by Paralytic; 2 March 2021, 16:57.

    Comment


      #3
      I mean I may be going back contracting again. I already have 2 lined up (the full time mon-fri one and the ad-hoc one which will be 8-16 hrs a week), both contracts will be outside IR35. Daily rates are comparable so in effect if I did 8 hrs at the weekend on the part time one that also equates to an extra day on the full time one. Both roles look like they will run for at least the next 12-24 months. I guess I'm wondering if I could run both through an Umbrella and if I did would it mean im paying out 2 lots of fees (one for each role). The ideal situation is to run the full time contract through a brolly and the part time one as sole trader I guess?

      Comment


        #4
        On the face of it, if both clients have confirmed they're happy for these contracts to be outside IR35 from April, it would make sense to down the Ltd company route. Of course, no-one here knows your personal circumstances, so only you can decide, but from a purely financial perspective, lower tax threshold salary plus dividends is what i'd be doing.

        (the above assumes you've not MVL'd in the past 2 years, and also that the day rate means the overheads of a Ltd company make sense, eg, are they £500/day or £100/day)

        As for running both through the same brolly - why not ask a few? I guess they'd be happy with that, but I suspect you'd be charged two sets of margins.
        Last edited by Paralytic; 2 March 2021, 17:58.

        Comment


          #5
          Thanks for your advice. I reckon I will prob go Ltd again (will wait to see what the Chacellor says tomorrow though re corp tax first!)

          Comment


            #6
            Are you absolutely sure the new one will be outside and if they say it is do they also mean after April? HAve they issued you with an SDS saying so? Agents are still trying to suck contractors in with an outside gig knowing it will go inside April still.

            Good luck working 7 days a week for the next 18-20 months. End of the pandemic is nigh. You wanna start enjoying it. Not working weekends IMO.
            Last edited by northernladuk; 2 March 2021, 22:45.
            'CUK forum personality of 2011 - Winner - Yes really!!!!

            Comment


              #7
              Both roles are direct so I assume that if they say its outside IR35 then im coverered (and the liability if not then falls to them rather than me). Oh and I'm not planning to work 7 days a week, will be taking Saturdays or Sundays off

              Comment

              Working...
              X