One-off six month contract - umbrella or limited?

[TheFaQQer]

Is this regardless of whether you are contracting under a Ltd or umbrella?

I am new to contracting myself, so imagine my accountant (just signed up with SJD) would know this and have informed me in due course.

If you are not sure if you plan to contract for the long term, would the best approach to be to not claim for travel from the outset?

I would be inclined to claim, and be prepared to fight that you were always intending to do more than one contract. If you take the effort, for example, to have company letterheads printed, have a website, etc. etc. then there is a better view of you intending to do more than one contract.

OTOH, you probably won't go to the extent of doing that lot if you're only going to be in it for a few months.

[Billy Pilgrim]

Is this regardless of whether you are contracting under a Ltd or umbrella?

I am new to contracting myself, so imagine my accountant (just signed up with SJD) would know this and have informed me in due course.

If you are not sure if you plan to contract for the long term, would the best approach to be to not claim for travel from the outset?

Don't be so daft......claim for travel...who on earth is going to 'prove' that you were not contracting for the long term??

By the way.....contracting is like Pringles....once you pop you just can't stop...!!!

[SueEllen]

Is this regardless of whether you are contracting under a Ltd or umbrella?

I am new to contracting myself, so imagine my accountant (just signed up with SJD) would know this and have informed me in due course.

If you are not sure if you plan to contract for the long term, would the best approach to be to not claim for travel from the outset?

You know HMRC has lots of webpages which you can find just by googling the terms you want. For example I put in "temporary workplace" and found this link
http://www.hmrc.gov.uk/employers/ebi...-travel-05.htm

[Hicks]

bear in mind that if its a one off contract , you should not be claiming any travel expenses

Is this regardless of whether you are contracting under a Ltd or umbrella?

I am new to contracting myself, so imagine my accountant (just signed up with SJD) would know this and have informed me in due course.

If you are not sure if you plan to contract for the long term, would the best approach to be to not claim for travel from the outset?

[Cheshire Cat]

If you're concerned primarily with which option maximises your net pay, take a look at one of the limited company calculators around the net. I think PCG have one. Nixon Williams too, IIRC. And this very site has a few calculators too. Plug in the numbers and hey presto. Also, don't listen to the Umbrella rep's argument that it is simpler than going Ltd. Incorporation and the associated set up is relatively straight forward.

[SueEllen]

And how does one prove 'intention'??

.

By having a legal argument with HMRC.

[applegrass]

You need to understand the figures first. Do you know if you'll be inside or outside IR35?

I'd be inside IR35, on £50 per hour / £400 per day.

I live in Manchester, but the office is in Nottingham (100 miles away) so I'd have to take temporary accomodation in Nottingham (be it a hotel, b&b or whatever). Would I still be able to claim accomodation or travel expenses?

[Hex]

Even for 6 months, I'd go Limited. Who knows, you may go on for longer. If you're outside IR35 then you'll take home a lot more, even if you're inside you may well be better off - it would depend on your daily rate and how much your accountant charged.

You need to understand the figures first. Do you know if you'll be inside or outside IR35?

[KevinS]

In order for travel expenses to be claimed through an umbrella company there has to be the intention of contracting at more than one location.

HTH

And how does one prove 'intention'??

Not having a dig at you, but it should be a bit more definitive.. I could argue that I intended to continue contracting but couldn't find another contract, so went back to permiedom..

[LisaContractorUmbrella]

For a short term contract an umbrella company would make more sense for you but, beyond that, if you decide to become a career contractor and don't mind the paperwork a Limited Company would be the way forward.

As Sidknows said, if you are only intending to do this one contract between permie jobs you will not be able to claim travel expenses. The reason for this is that travel is only allowable for temporary assignments. The umbrella company would be your employer and, if you only intend to have one contract through them, your place of work would become permanent by default, however short the contract. In order for travel expenses to be claimed through an umbrella company there has to be the intention of contracting at more than one location.

HTH

[TheFaQQer]

If you're likely to contract again, then go Ltd.

If you're not going to contract again, then umbrella.

[sidknows]

bear in mind that if its a one off contract , you should not be claiming any travel expenses

[applegrass]

I have done.. and they all basically say 'Go limited unless you have a short-term contract'.

The question is, for my mind, how short is short ?!

[Archangel]

Hello! Newbie here! *waves*

I'm about to embark on my first six-month contract, as found via an agency. They've suggested I either go down the umbrella route (with Giant) or a limited company route.

As I understand it, forming my own limited company would earn me a little more money for a bit more admin hassle, which I'm willing to do. But if the contract is only going to be for six months - and I have no idea whether I'll find another contract afterwards - which is better? Limited or umbrella?

Many thanks for your help!

Andrew

Why not have a look at the "sticky" above entitled "ltd company or umbrella" to start with?


Or the "LTD vs Umbrella" thread in the "business / contracts" forum.

[applegrass]

Hello! Newbie here! *waves*

I'm about to embark on my first six-month contract, as found via an agency. They've suggested I either go down the umbrella route (with Giant) or a limited company route.

As I understand it, forming my own limited company would earn me a little more money for a bit more admin hassle, which I'm willing to do. But if the contract is only going to be for six months - and I have no idea whether I'll find another contract afterwards - which is better? Limited or umbrella?

Many thanks for your help!

Andrew