Advice please - new part time contractor

[northernladuk]

Personally I think the SE option is a read hearing.. Very few companies/agents will take people on SE basis. Get a LTD or umbrella and do it properly.

Do a search on these forums for the term Self Employed and you will find out why you cannot do this.

Self Employed

Be aware that even if this method is what you would like, your clients or agency may not be prepared to engage you on this basis. This is because that if you’re self-employed status is challenged they could become liable for any extra tax and NIC liabilities that may be due.

The Income Tax (Earnings and Pensions) Act 2003 Section 44 effectively prevents individuals from trading as sole trader where an agency is involved, as it obliges the agency to treat the individual as if they were an employee, and so required to deduct PAYE and NIC from any payments due.

[retreat]

Thank you all so much for all your helpful advice.. I don't want to worry about IR35 and the client getting hit for a huge tax bill so I'm definitely going for umbrella.

Do I need to be registered, have sent all the paperwork etc before I start work on Tuesday morning?! Cutting it fine...

[mudskipper]

Summary of the options here http://www.parasolgroup.co.uk/contra...or-freelancer/

Not sure why it suggests sole trader is only suitable for short gigs/multiple clients though.

It is the simplest option (and will leave more in your pocket that a brolly I believe), but it depends if your client will accept it - worth asking before you rule it out.

[LisaContractorUmbrella]

Thank you all so much for all your helpful advice.. I don't want to worry about IR35 and the client getting hit for a huge tax bill so I'm definitely going for umbrella.

Do I need to be registered, have sent all the paperwork etc before I start work on Tuesday morning?! Cutting it fine...

You are cutting it a little fine but most umbrella companies should be able to set you up with an account within 24 hours - you will just then need to send in your P45, identification etc etc before they can make payment to you

[Earl Purple]

Once you have the Limited Company you will use it for all your contracts. You will need certain insurances:

- Public liability
- Professional indemnity
- Employers liability.

You may wonder why you need the 3rd if you are the only employee. If you are within IR35 then you probably don't need to worry, but it is useful to have otherwise in case you want to "substitute" labour.

You may also want some legal insurance to cover you in case you have a dispute with the client company, and to find yourself an accountant.

[Taita]

(Be aware that even if this method is what you would like, your clients or agency may not be prepared to engage you on this basis. This is because that if you’re self-employed status is challenged they could become liable for any extra tax and NIC liabilities that may be due.

The Income Tax (Earnings and Pensions) Act 2003 Section 44 effectively prevents individuals from trading as sole trader where an agency is involved, as it obliges the agency to treat the individual as if they were an employee, and so required to deduct PAYE and NIC from any payments due.[/QUOTE] from NLUK)

Absolutely correct. As far as I am aware part of the HMRC random reporting regime is to spot check agencies for SE engagements as well as Off Shore companies. Just because an agent is prepared to go along with your request does not mean that HMRC will not come visiting you, probably after an aggressive visit to the agent ( the newer they are, the more likely an inspection) who will be told that they are liable for any shortfall in your income tax and NI contributions.

The shortfall will be presented to the agent as an (over) guesstimate of the contractor's liability and the agent will probably be told to pay up and then claim back from the contractor. Beware, in the unlikely event that the contractor pays the agency and HMRC, the latter will refund to the contractor!

Properly organised (usually large) non-agency employers will shun such contract arrangements like the plague purely on the grounds that one small accommodation for a respected and valued line manager/good contractor can trigger a very deep and highly inconvenient investigation. If you were RBS, Nissan, BHS or similar you could do without the hassle!