Hi
So I've got the age old question; I'm a young developer who's just picked up his very first contract and am trying to decided if I should/could trade under a limited liability company.
Yes, yes, I've read LOADS of resources and past posts but since I think my particular situation/mind set might be a little uncommon I was just looking for a little advice particular to my situation. I understand and have considered all the normal factors such as pay, job security, IR35 etc.
So the stuff that makes me somewhat unusual (I think, it may turn out its not that uncommon at all);
1) I'm not a UK national and am here currently on a HSMP / General Tier 1 Visa. I heard that either I cannot setup a limited company or if I can, it will take more time and paperwork. Is either statement true?
2) I understand there are tax benefits if your contract is "away from home". Thing is, I have no "home". Since I left my homeland almost 18 months ago I've been staying with friends, subletting and generally avoiding having a permanent residence. As such my name has never appeared on a lease or utility bill in this country. For my new contract (outside of London) I'll most likely have to bite the bullet and sign up to something but I do intend on returning to London most weekends. Does my lack of permanency exclude me from the ability to setup a limited company or reduce the benefits of doing so?
3) Contracting is both a career and a lifestyle choice for most. For me its all lifestyle. Being from the far side of the world its fairly obvious I'm here to travel as much as possible and I'm fortunate enough to be in a very enviable position when it comes to my chosen profession, both in terms of pay and time off ... hence my dropping my perm job in favour of contracting. Getting to the point, my intention is to work 6-9 months and then travel for 3-6 months, repeating such a cycle for the next few years. Does having so much time away so often reduce the benefits (or increase the subjective costs) of running as a limited company?
4) Currently, I'm stone cold broke
So even if I WERE to set up a limited company, it would be a while before I can save up enough to do so (after paying off a few loans of course!). I've checked with my recruiter and he said its no problem changing mid-contract on his end but someone mentioned to me it can take a month or more before cash starts flowing from the limited company account into your personal accounts. Is this true? Should I anticipate yet more months subsisting on toast and water three times a day?
Anyway, I think that's all, for now at least. Filling out the various calculators and spreadsheets reveals a very significant monthly difference in take home pay between the Umbrella and Limited (outside IR35 of course) options. Which is extremely important to me remembering travel (which costs lots) is a high priority, for now at least. But obviously those calculators can't consider any of the above points.
Any advice would be helpful, particularly if you've been in one or more of the above situations.
Cheers.
So I've got the age old question; I'm a young developer who's just picked up his very first contract and am trying to decided if I should/could trade under a limited liability company.
Yes, yes, I've read LOADS of resources and past posts but since I think my particular situation/mind set might be a little uncommon I was just looking for a little advice particular to my situation. I understand and have considered all the normal factors such as pay, job security, IR35 etc.
So the stuff that makes me somewhat unusual (I think, it may turn out its not that uncommon at all);
1) I'm not a UK national and am here currently on a HSMP / General Tier 1 Visa. I heard that either I cannot setup a limited company or if I can, it will take more time and paperwork. Is either statement true?
2) I understand there are tax benefits if your contract is "away from home". Thing is, I have no "home". Since I left my homeland almost 18 months ago I've been staying with friends, subletting and generally avoiding having a permanent residence. As such my name has never appeared on a lease or utility bill in this country. For my new contract (outside of London) I'll most likely have to bite the bullet and sign up to something but I do intend on returning to London most weekends. Does my lack of permanency exclude me from the ability to setup a limited company or reduce the benefits of doing so?
3) Contracting is both a career and a lifestyle choice for most. For me its all lifestyle. Being from the far side of the world its fairly obvious I'm here to travel as much as possible and I'm fortunate enough to be in a very enviable position when it comes to my chosen profession, both in terms of pay and time off ... hence my dropping my perm job in favour of contracting. Getting to the point, my intention is to work 6-9 months and then travel for 3-6 months, repeating such a cycle for the next few years. Does having so much time away so often reduce the benefits (or increase the subjective costs) of running as a limited company?
4) Currently, I'm stone cold broke
So even if I WERE to set up a limited company, it would be a while before I can save up enough to do so (after paying off a few loans of course!). I've checked with my recruiter and he said its no problem changing mid-contract on his end but someone mentioned to me it can take a month or more before cash starts flowing from the limited company account into your personal accounts. Is this true? Should I anticipate yet more months subsisting on toast and water three times a day?Anyway, I think that's all, for now at least. Filling out the various calculators and spreadsheets reveals a very significant monthly difference in take home pay between the Umbrella and Limited (outside IR35 of course) options. Which is extremely important to me remembering travel (which costs lots) is a high priority, for now at least. But obviously those calculators can't consider any of the above points.
Any advice would be helpful, particularly if you've been in one or more of the above situations.
Cheers.
