Limited company or just go sole trader

[Hobosapien]

Work is mostly being obtained through people I know. Until my health has improved it will continue like this.

See if they'll accept sole trader operating method and if so know the implications so no unforeseen issues later.

[8533578]

Thank you all for your input.

I'm happy to pay the monthly fee and have done so in the past but if a few months go by without me doing any work then paying £100-£150 is hefty considering I don't have any other source of income.

I have spoken to a few local accountants and one said I should just invoice as a sole trader because the work is ad hoc but the other said I should use the limited company as it is already setup.

Work is mostly being obtained through people I know. Until my health has improved it will continue like this.

[northernladuk]

If you think 100 quid a month for an accountant is hefty, wait till you see the penalties for messing up.....

[Jeremiah@RHJAccountants]

I would recommend speaking to some accountants who specialise in contractors.

You can explain your situation and receive the correct advice going forward.

In terms of hefty fee that really depends on what service you want and the price you think this is worth.

What may be expensive to you may be average market price for some.

You should expect prices to range from around £60 - £200 per month although i do feel £200 per month is on the high end.

I would say Ltd is generally better if your contract is six months plus.

[Hobosapien]

Option one is to use the limited company again but this means paying a hefty monthly fee which will just eat up my earnings or I just invoice as a sole trader.

How much is a 'hefty monthly fee'? There may be cheaper accountancy options.

I personally ditched the specialist monthly fee accountant and went with a normal one that charges for work done when done. I do my own VAT and self-assessment so the charges are mostly for preparation of year end company accounts and sorting out the PAYE/NI so they tell me how much to pay HMRC each quarter. Still comes to best part of a grand each year so not sure how that weighs up to the monthly options. Maybe it's me that's paying over the odds.

However, it depends on how much work you're likely to be doing in the future as to whether it may be better/cheaper to use an umbrella than re-starting the ltd from a dormant state.

I very much doubt sole trader is even an option as agencies won't touch it and not sure any direct clients would either.

My first contract started out with me operating as a sole trader but a few months into it they said I'd need to change approach as they said they would be on the hook for employers NI (and possibly other taxes, can't remember the specifics as it's a long time ago), so I went ltd. This contract was direct as I knew a director from a previous company we'd both worked at and left, so he got me in the door to do some work for them, hence the mess at the start.

[Andrew@Wisteria]

Hi all,

I'm hoping to get some advice with regards to my current situation. A few years ago I setup a limited company as I secured some work. It was only part time but lasted about six months so thought it was the best way to process invoices. I signed up with an accountancy practice and things just ticked over. Unfortunately the work came to an end and I wasn't able to get any new contracts mostly due to health reasons.

After a while I realised I was still paying the full accountancy fee even though I wasn't processing any invoices (at the time I didn't know there was an alternative) and felt that this was pointless. So my accountant gave me an option to make the company dormant so I can avoid the monthly fee.

Still struggling with my health I was fortunate to get some ad hoc work recently but am now unsure as to how I should proceed with invoicing. Option one is to use the limited company again but this means paying a hefty monthly fee which will just eat up my earnings or I just invoice as a sole trader.

As a contractor who is only processing a few invoices with very little turnover what do you think is the best option for me.

Regardless of whether you can trade via sole trader or not, I typically wouldn't bother forming a company for a few invoices/low turnover, unless there was a really good reason for doing so - which there doesn't appear to be so from here.

[northernladuk]

Either LTD or Umbrella. There are things around sole traders that make it unattractive to potential clients and you certainly won't get anything from agencies.

[gables]

The will probably depend on how you're getting the work and who the client. So for example work sourced through an agent will most certainly require a LTD company. Work sourced directly with client may be possible as sole trader if they are happy with that route.

[8533578]

Hi all,

I'm hoping to get some advice with regards to my current situation. A few years ago I setup a limited company as I secured some work. It was only part time but lasted about six months so thought it was the best way to process invoices. I signed up with an accountancy practice and things just ticked over. Unfortunately the work came to an end and I wasn't able to get any new contracts mostly due to health reasons.

After a while I realised I was still paying the full accountancy fee even though I wasn't processing any invoices (at the time I didn't know there was an alternative) and felt that this was pointless. So my accountant gave me an option to make the company dormant so I can avoid the monthly fee.

Still struggling with my health I was fortunate to get some ad hoc work recently but am now unsure as to how I should proceed with invoicing. Option one is to use the limited company again but this means paying a hefty monthly fee which will just eat up my earnings or I just invoice as a sole trader.

As a contractor who is only processing a few invoices with very little turnover what do you think is the best option for me.