Reply to: Chesterfield Group

[malvolio]

Ask an accountant. Seriously - you could get accused of various dodgy practices if an IT consultancy company started shovelling money into a retail one or vice versa. I'm sure there's a way to do it legally, but take qualified advice first.

[Stimpy]

Hi all,
well that contract fell through, project timelines have changed (they have however indicated that in 6 months they will need me )
I've now pretty much decided to go down the ltd route. (other contract potentially on its way)
A question I have asked here before, but thought I'd ask again.

My wife has an Ltd company for her business (making and selling stuff)
I will obviously have my own.

Now her company will obviously has startup costs (materials, machinary, etc).
Any comments on the best way to move funds between companies.
I.e. straight investment from one company to the other, or
a holding company of which we are both shareholders.
All profit is moved from our respective ltds to the holding company
from which we pay ourselves dividens (and a small salary).

We could obviously club together into one company, but that would leave single company at risk, should something major happen. i.e. my wifes goods hurt somebody??

[malvolio]

It isn't and it's cheaper. You have to tell the accountant slightly more about your income (all of three seconds), you have to raise your own invoices and, well, that's about it, really. Unless you count time spent making your own decisions about salary, dividend and where to put the extra savings. Bit of a no-brainer really.

[OrangeHopper]

I'm bored again so someone explain to me why having an accountant like SJD help with a Ltd company is more time consuming than going with an umbrella?

[aussieItman]

yes mate I used to go with Chesterfield, the Isle of Man company. They were really good for what I need at the time, efficent and professional. so no probs. I've also contracted with Hudson and they were great.

[malvolio]

In which case, you've had the answer to that - use Parasol's umbrella services.

When you've learned a bit more about the mechanics, you can make a more informed choice - but be very clear that the most tax-efficient way is your own company and the right salary/dividend mix. Anything else, with Gordie around, is courting disaster.

[Stimpy]

Sorry if I came across a little plunt (watching an production system upgrade running through over night, makes one a little snappy), However if I were giving advise I would have phrased it a little better, i.e. "in my opinion.....", rather than accusing someone of being thick.
I am a newbie and am trying to find out exactly what I am getting into and am thus researching, as to what the best option for me is.
I'm used to doing time sheets and keeping records of reciepts, etc, etc.
I have been speaking to other contractors I know (who probably are sailing a little close to the wind) on how much effort they spend getting funds out of their Ltd companies (although probably to avoid some tax).
Hence I was looking at some opinions that would suit my situation best

[expat]

You said: I also can't afford to have my funds stuck in the company, without me having to go through loads of hassle to get my hands on it.

What makes you think the getting funds out of your ltd company would be any more hassle than getting them out of an umbrella....

If anything it's the other way round: it's all too easy to pay yourself money out the the Company that wasn't really yours to keep

[Hex]

I would say don't go with the umbrella your agency recommends unless they are also well recommended elsewhere. Your agency is obviously recommending them as they get commission on recommendations rather than because they do a good job.

You have already had good advice about umbrellas.

You said: I also can't afford to have my funds stuck in the company, without me having to go through loads of hassle to get my hands on it.

What makes you think the getting funds out of your ltd company would be any more hassle than getting them out of an umbrella. It shouldn't be much more than paying yourself via PAYE (which is easy - your accountant will work it all out for you) or alternatively telling your accountant that you are declaring a dividend and transferring the funds for the dividend from your company account to your personal account.

[Mrs Smith]

I'm famous for being less than polite ...

Ooh ...and very direct. Mr Malvolio is something of an icon for us.

[malvolio]

I was being constructive. If you are considering going freelance without understanding how payments work or why you should use umbrellas or set up your own company, it's a bit like buying a Porsche without having first learned to drive.

It may also cross your mind that nobody owes you a living and while you have a good degree of protection as a permie, you have none at all as a freelance, and an awful lot of things that will trip you up, cost you unnecessary money and even prevent you working. So wise up and listen to the people who have been there and got the bruises, it is just possible we get tired of hearing inexperienced heroes telling us how easy it all is.

I'm famous for being less than polite and not suffering fools - but if you can't hack that, re-think being a freelance. Behind the banter though, there is a lot of good advice. You would do well to learn what you;r doing first, then complain.

[Fleetwood]

you havn't got anything constructive to say, don't say it at all.

Stimpy's third post and already he's telling everyone how to behave!!!

[Stimpy]

Having worked in consultancy for many years and recently gone to a permanent role, I find I miss the variety that consultancy brings with it.
Also even calculating my tax burden at 40% I'll still be much better off that I currently am.
I have to admit there are some individuals on this board, that are not the most friendly or welcoming to newbies (easy to insult people from behind a keyboard). Making the decision to go contractig in the first place is scary enough. It is a minefield out there, with a vast amont of regulations to get your head around. Everybody has to start somewhere, so give guys a chance if you havn't got anything constructive to say, don't say it at all.

[malvolio]

although I'll probably have to do it all for my wifes company she is just start (Proper company that makes stuff and sells to the public). I also can't afford to have my funds stuck in the company, without me having to go through loads of hassle to get my hands on it

Nuff said. Stay permie. You have no idea what you're getting into, have you?

[privateeye]

I've in the past used both umbrella and Ltd Co options and to be honest their is not much difference in the amount of admin work most of the time.

Where you can get hit timewise are the deadlines Gov departments set for certain deliverables such as annual and VAT returns etc etc. If you are not organised then this may be a problem as a Limited Co - but then again if you are not organised you will not submit the info to the Umbrella to get paid. The difference being that as a Limited Co the Gov fine you.

There are a number of good legal Umbrella companies one already mentioned is parasol, another is Contractor Umbrella - I think both have links on the home page. Avoid Umbrella's that claim to have special dispensation from the Inland Revenue this is in my opinion mis-selling and you will (and you said you don't want to) get hit further down the line. Dispensation is an agreement from the Inland Revenue for these Umbrellas not to fill in certain forms - and some of these Umbrellas use it to falsely claim expenses that you have not incurred which could well come back to haunt you later.