New contractor

[krisby]

Having been unemployed for quite a while I have just been offered a contract, but I know nothing of the ways of the contractor.

I was asked during my interview if I was a company or had a contracted before, I said no, so he said nevermind they would run me through an agency (not used until this point).

So I had a call first thing this morning from them with the term and day rate, which I accepted. He then sent me an email at 1740 this evening, with terms, opt out, contract etc, but there was mention made of a limited company or umbrella company, suggesting they will only deal with a company.

Does this mean then that I can't just be self employed without a company? Or if a company is involved, particularly an umbrella company, I assume they would mean themselves? So they handle it all, invoice for me, then pay me everything and I have to deal with all my own PAYE?

As the contract is only 3 months, and I am preferably after permanent employment I don't want to be incorporated, so I need whatever the simplest option is.

I have asked them if they can act the umbrella, but I won't be getting an answer on that until Monday I assume, plus, from my point of view, I thought that was what they were providing for their fee, afterall, they were not the recruitment agency, I thought they were charging a fee to be the middle man for my timesheets.

Obviously a noob here, so any help/guidance is appreciated.

[SueEllen]

Over on the right of this page under" CUK Navigation" is a list. Click on the one that says "First Timers" and have a good read.

In regards to finding an umbrella to start off with representatives from both Parasol and ContractorUmbrella post frequently on this forum, which means if you have any issues then you can air them. (Google for their website details.) I would suggest you phone both of them for more details.


I should add due to legislation you cannot work through an agency as self-employed to do IT work, you only have the choices of:
1. Working through the agency as a temp
2. Working through an umbrella company
3. Working through a limited company.

I should add that there are other schemes and other umbrella companies around.

However most of the schemes sound too good to be true, are complex and based on tax loopholes which when closed by legislation have caused grief to some who have used them.

Yes there are other umbrella companies around and the agency may suggest one or two to you. However as it's your money they are dealing with you should do your own research. There are umbrella companies that have gone bust, others that conduct themselves in a way that breaches legislation and others that have high charges.

In the case of any scheme or umbrella company that breaches legislation it is you, not the company that has to pay HMRC back.