Umbrella to ltd

[Greg@CapitalCity]

Usually around £12-15 per hour

The threshold at which a ltd company makes sense (vs PAYE) from a tax perspective is around £12-15 per hour. You have been contracting for a long time - so normally the only other thing I would add is ensure you will be contracting for a minimum of 3-6 months to make the whole set-up worthwhile.

[kingcook]

Actually... i just remembered.... i asked for a P45 another time (when i was leaving my accountant).

The time when i claimed, i told the Job Centre that i had been laid off (yes - by my own ltd co). Due to lack of work.

My ltd co started a contract 1 month later, at which time i told Job Centre that i had found work.

I had around £240 paid to me that month (woo hoo) and council tax benefit (a saving of about £4/mth) (big wooo hooo)

[kingcook]

well no. It's what to do if I have a ltd and need to sign on, do I have to close my ltd or what?!

You can get your accountant to issue you with a P45 if you like.

I did it once, but didn't bother after that because it was too much of a PITA filling in job seekers allowance forms, going for job centre interviews (and pretending i was looking for another job).

I got funny looks when i showed them my bank statements, payslips and divi vouchers

[jmo21]

If your rates are that low and you are expecting time off, maybe a permie role would make more sense for you?

Otherwise, sticking with a brolly probably will be better than having a ltd in your situation.

[PinkPoshRat]

well no. It's what to do if I have a ltd and need to sign on, do I have to close my ltd or what?!

[kingcook]

My worry over going ltd is that I sometimes have a few months gap between contracts, so can't figure out how I would ever manage to pay myself.

What happens ATM? Does your umbrella co. give you free money?

[PinkPoshRat]

I've been contracting via an umbrella for a while. My worry over going ltd is that I sometimes have a few months gap between contracts, so can't figure out how I would ever manage to pay myself. With a ltd, everyone keeps asking what my expected turnover will be, and I don't have any means of answering that question as it totally depends on the market!!

I also have to take the very ungracious step and sign on sometimes (obviously when not working) so having an umbrella makes it easy - not too sure what I would do if I was running a ltd and had to sign on?

[Alan @ BroomeAffinity]

Even down to about £30k per annum or less it is often worth taking the limited company route. Ignoring expenses, £30k pa thru umbrella is about £1656 NET per month. Thru ltd it is £2124. More if VAT registered and on the flat rate scheme.

[girlfriday]

Hi all,

First time poster so please be gentle...

I've been contracting for about 10 years now and I've always gone umbrella, mainly because I can't be bothered with all the paperwork and hassle, and I never thought my rate was high enough to justify it. Luckily I have a new contract that pays about 50% more than the last one, so I'm starting to think about ltd again.

However, I have a question for all you seasoned contractors with ltd's... at what day rate do you think it's worth moving from umbrella to ltd? Bearing in mind that the only expense I have regularly is mileage. Is there a "if you're making x amount, ltd is better"?