First contract

[ijwrighty]

Hi All,

I have just been offered my first contractor role through an agency. Currently, I am full time and want to hand my notice in ASAP. The agency who have placed me are suggesting that I set up via an Umbrella Company so I can get my company setup quicker and therefore get the contract on Monday. Once the contract is signed, she then says I can transfer to a Limited Company (which is what I want to run as).

Does anyone have any advice for me with regards to this please (pros/cons etc)

Many thanks in advance

[GillsMan]

Both contracting and running a limited company represent different mind sets and challenges from what you have done in the past. My advice is to go via an umbrella while you learn the contracting mindset. Then, either at the end of this contract, or at a renewal change to LtdCo.

I did exactly that and am glad. I learned how to be a contractor first, then it learned how to run a Ltd Company. That was nearly four years ago, and I now have two full time staff and an office as we've grown, because I spent the time learning how to do things properly.

The thing you'll need to remember about brollies is that if/when you leave there may be issues with claiming expenses due to the temporary workplace factor.

So, learn how to be a contractor then learn how to run a LtdCo. Do it properly and you'll stand a greater chance of being successful. Do it wrong, and it's a massive ball ache.

[kingcook]

Speak to an accountant. Most of them on this forum should be able to set a company up for you very quickly.

[PerfectStorm]

I'm in the same boat as you and I went limited company. Why? Well it's the difference between 75% take home and about 60% you get under umbrella. That's no small margin and money's hard to come by these days.

The way I see it, this contracting gig is going to involve picking up some new concepts and I just see the limited company thing as one of those. If you employ an accountant (SJC Accountancy or Nixon Williams seem fine to me) they can largely do it for you.

For the sake of what could amount to hundreds or thousands of pounds off your original contract alone I would go for a later start date and ignore anyone who wants you to get into an umbrella to start monday. It makes no difference to the recruiter so they're not as interested in your personal wellbeing here.

I reckon you could get it all sorted in a couple of weeks. Initially all you'd really need to get to start would be a limited company name (go to the companies house website, costs £15 and usually delivered next day) and a bank account (takes a couple of weeks, you can use a high street bank or your accountants can set you one up, it needs to be a special business bank account and not your personal one). Also make sure you get Professional Indemnity Insurance, costs about £150 from Morethan or Hiscox and available same day. Your accountants can also register you for VAT, which means you can charge VAT on your services and possibly pay VAT itself at a lower rate (keeping the extra for yourself).

The list of things above is what makes some people feel defeated and go with an umbrella but I got all mine sorted out from a position of knowing nothing, like you, a few weeks ago and I reckon you could do it . The benefit would be enough to buy you a small holiday per month. For the sake of a little bit of admin (which can be done in stages, not all of it needs to be ready on day one) by the time you start the job you'll have the same day to day activities as an umbrella person but with loads more money.

If they just need a company set up to write the contract, you could have that active from Tuesday anyway.

[kal]

Hi All,

I have just been offered my first contractor role through an agency. Currently, I am full time and want to hand my notice in ASAP. The agency who have placed me are suggesting that I set up via an Umbrella Company so I can get my company setup quicker and therefore get the contract on Monday. Once the contract is signed, she then says I can transfer to a Limited Company (which is what I want to run as).

Does anyone have any advice for me with regards to this please (pros/cons etc)

Many thanks in advance

And no doubt they are willing to do you a favour by introducing you to a brolly they have dealt with before = a nice backhander for the pimp

[ijwrighty]

What a superb forum!

Massive thanks to all. Im going to setup Limited Company and at least get the name up and running so I can still get the contract for next week.

[PerfectStorm]

And no doubt they are willing to do you a favour by introducing you to a brolly they have dealt with before = a nice backhander for the pimp

I was told "we're not allowed to recommend a company, but lots of people use X..."

[TykeMerc]

What a superb forum!

Massive thanks to all. Im going to setup Limited Company and at least get the name up and running so I can still get the contract for next week.

That's entirely doable.

You can set up a MyCo Ltd in a few ways, they're all fast and not expensive.

1. Do it yourself - Companies House have fairly simple forms
2. Buy "off the shelf" from a formation agency
3. Engage an accountant (many post on here) and they can sort it for you. As it's your 1st contract having the services of an accountant is wise.

I hope it all works out well for you

[gardener]

Hi All,

I have just been offered my first contractor role through an agency. Currently, I am full time and want to hand my notice in ASAP. The agency who have placed me are suggesting that I set up via an Umbrella Company so I can get my company setup quicker and therefore get the contract on Monday. Once the contract is signed, she then says I can transfer to a Limited Company (which is what I want to run as).

Does anyone have any advice for me with regards to this please (pros/cons etc)

Many thanks in advance

In case of LTD you will also have to deal with a crappy contract that an agency will give you, pushing you out of your rights, making you take all the risk etc.

[ijwrighty]

Hi Gardener. Can you expand a little further please?