How does a FTC affect my Limited Company Status ?

[Bellona]

Been contracting about 18 months.

My specialism is Business Change/Transformation and Quality/Improvement.

Got canned early from last gig ( lack of funds) and market really slow.
As my roles are not usually subject to renewal (if I do the job right they shouldn't need to renew me ), there isn't a steady supply of opportunities.

I have steered clear of fixed term contracts thus far, but an opportunity has popped up that is close to home and will really enhance my reputation in my field: downside is it is 2 year FTC.
I am a sole employee of my Ltd Co - will I be able to maintain the trading status of the company or would I have to cease to trade and effectively become a temporary permie for the duration ?

Advice, suggestions welcome.

[kevpuk]

FTC are generally (always?) contracts of employment = you could not perform this through YourCo

[northernladuk]

Wow, you didn't spot the other FTC discussion right below this thread then?

[Barley]

Wow, you didn't spot the other FTC discussion right below this thread then?

Even I checked down the thread list before I posted it *polishes halo*


Aside from the relative reduction in pay, personally I couldnt accept a FTC for the reason on Limited Co impact. Im looking to buy a new house in the next year or two and dont fancy risking the potential negative impact a change in employment status would entail. Dont want to be in the position of less than 3 years solid accounts.

[DaveB]

Been contracting about 18 months.

My specialism is Business Change/Transformation and Quality/Improvement.

Got canned early from last gig ( lack of funds) and market really slow.
As my roles are not usually subject to renewal (if I do the job right they shouldn't need to renew me ), there isn't a steady supply of opportunities.

I have steered clear of fixed term contracts thus far, but an opportunity has popped up that is close to home and will really enhance my reputation in my field: downside is it is 2 year FTC.
I am a sole employee of my Ltd Co - will I be able to maintain the trading status of the company or would I have to cease to trade and effectively become a temporary permie for the duration ?

Advice, suggestions welcome.

You will be an employee of the client but that doesn't mean you have to shut down your Ltd. You can keep it going, but it will be regarded as dormant and you should file accounts accordingly.

details here: Life of a Company - Part 1 Annual Requirements - GP2 includes information on Annual Returns, Accounting references dates, Accounts, and Auditors You want section 8.

Having said that, if you get the gig you could always pitch it to the client to run it as a fixed term contact with your ltd for the same money. You'd be slightly better off that way and it would work out cheaper for them. Depends how much the FTC is worth and how flexible the client is willing to be.

[DirtyDog]

I am a sole employee of my Ltd Co - will I be able to maintain the trading status of the company or would I have to cease to trade and effectively become a temporary permie for the duration ?

The two aren't mutually exclusive.

Yes, you essentially become permie - you will be paid via PAYE.

No, you don't have to cease trading - keep it dormant if you want (nil PAYE and nil VAT return plus annual return), or shut it down if you aren't going to need it in the future.

[DirtyDog]

Even I checked down the thread list before I posted it *polishes halo*


Aside from the relative reduction in pay, personally I couldnt accept a FTC for the reason on Limited Co impact. Im looking to buy a new house in the next year or two and dont fancy risking the potential negative impact a change in employment status would entail. Dont want to be in the position of less than 3 years solid accounts.

Have a read through some of the mortgage threads - some brokers don't require three years of accounts, as long as you are in contract.

[Bellona]

Wow, you didn't spot the other FTC discussion right below this thread then?

Yeah, I did, although when I started typing it wasn't at that position in the pecking order and I got to about the fourth one and got bored of trying to trawl through the insults/banter to get to the core ( which perhaps I should have been more specific about)

How will my limited company be affected in terms or trading and do people think it is worth doing to enhance my reputation when I come back to contracting.

When I did my initial searches the threads I got were more about the income comparisons.

Sorry if you feel I am wasting your time

[Bellona]

The two aren't mutually exclusive.

Yes, you essentially become permie - you will be paid via PAYE.

No, you don't have to cease trading - keep it dormant if you want (nil PAYE and nil VAT return plus annual return), or shut it down if you aren't going to need it in the future.

Thanks for that, i'll google how to do it. Didn't think of that

[Bellona]

Thanks Dave !No need to google, off to read this.
Worth mentioning the option of contracting with the LTD at the FTC rate if I go for it and get to interview stage. Will keep this in my pocket for future scenarios as well.

You will be an employee of the client but that doesn't mean you have to shut down your Ltd. You can keep it going, but it will be regarded as dormant and you should file accounts accordingly.

details here: Life of a Company - Part 1 Annual Requirements - GP2 includes information on Annual Returns, Accounting references dates, Accounts, and Auditors You want section 8.

Having said that, if you get the gig you could always pitch it to the client to run it as a fixed term contact with your ltd for the same money. You'd be slightly better off that way and it would work out cheaper for them. Depends how much the FTC is worth and how flexible the client is willing to be.