Reply to: Need advice on when to form a Ltd. company?

[Jessica@WhiteFieldTax]

My advice would differ a little to the other accountants on here; it may be sensible to get your company in place before your contract starts - depending on how much time there is between offer and start.

Yes, companies can be incorporated in a matter of hours, but HMRC registrations take longer (small issue) and bank account opening times are a lottery (bigger issues). It takes one more stress out of things if this is ticked off earlier.

I don't know about others, but my firms policy is not to start monthly charges till the contract starts, so a company can be set u in advance without financial penalty.

Good luck with finding the contract, and getting going.

[Craig at Nixon Williams]

To echo the advice of others, I would wait until you have your first contract secured before forming a company. The formation only takes a few hours so they usually come back the same day and once you have the registration number you should be good to go!

When you appoint an accountant they will be able to form the company and complete the necessary registrations with HMRC as part of the set-up process.

Hope this helps!
Craig

[TykeMerc]

True, if you're new to contracting and have never had a Ltd before you can do a lot worse than to engage a contractor savvy accountant early on. There are a fair few who post on CUK so tracking one down will be trivial.

They can and will offer useful advice if you ask for it and you would be wise to ask as they're very used to answering questions from people like us who're not accountants

[Jeremiah@RHJAccountants]

I would recommend speaking to an accountant when you secure your first contract.

A company can be formed within a day and most accountants like us can introduce you to a bank and what insurance you will need.

Other things to think about is registration for:

PAYE
VAT and the flat rat scheme
Share structure

An accountant will be able to go through this with you and any other questions you may have.

Good luck with getting that first contract!

[eek]

@Wanderer - Invaluable advice. This really helps. Thank you!
@eek - Thanks for your input. I have 5 years n Financial services including insurance and banking, 3 years each Telecoms and Transport and rest in manufacturing and Government. Do you think my experience better or having 15 years in Insurance/Banking? I thought its latter though and wanted to completely focus on Financial services, if possible insurance sector.

My viewpoint is to never end up in 1 area as that could leave you in a sticky situation if that area of the market dries up. Personally its safer to work across 2 or 3 different markets (even 2 technology stacks) so that if 1 area goes quiet you aren't left on the bench.

[andynags]

@Wanderer - Invaluable advice. This really helps. Thank you!
@eek - Thanks for your input. I have 5 years n Financial services including insurance and banking, 3 years each Telecoms and Transport and rest in manufacturing and Government. Do you think my experience better or having 15 years in Insurance/Banking? I thought its latter though and wanted to completely focus on Financial services, if possible insurance sector.

[andynags]

How was citizenship an issue?

Unfortunately, I didn't have a straightforward case for citizenship. So professional advice was to to build a career history in a permanent job. Not sure if mattered though in hindsight.

[eek]

IT Architect with 15+ years experience currently in a top insurance firm. I couldn't quit earlier as I needed to sort out my british citizenship

15 years experience should be fine. At first glance I read it as 15 years experience at an insurance company. Assuming that you can show experience across a number of industries you should be fine

[Wanderer]

IT Architect with 15+ years experience currently in a top insurance firm. I couldn't quit earlier as I needed to sort out my british citizenship

Yeah, yeah, contracting is a closed shop and the money is completely rubbish so don't even think about trying to muscle in on our territory, especially as you are a foreigner.

Nah, seriously though - with that much experience you will be fine so jump on in. If at all possible try to get a contract lined up before you resign from your permie position or perhaps pre-warn them that you will be leaving and negotiate a short notice period. If that's not possible then be prepared for a period of unemployment...

I did a post a while ago of Common Noobie Mistakes, have a good read of that and make sure you don't get bitten by any of them or you will probably be met with derision from some of the hardened contractors here.

In particular, you need to make sure that you have a decent stash of money in the bank to keep you going (6 months worth should do it) or get yourself a flexible mortgage while you're still a permie (if you are a home owner). Also, don't go underselling yourself and taking a rate that's too low because there are a lot of hidden expenses that you have to cover for as a contractor.

Forming a company when you get your first contract offer is fine, it can be done in a day or so. After that, it will take a couple of weeks for VAT registration and a bank account to be setup but you will probably invoice monthly and then not be paid for a month after that so it's not such a problem.

You definitely want to engage an accountant from the outset though, their advice at setup time is invaluable and they will introduce you to a bank and help smooth the whole process over.

Good luck!

[stek]

IT Architect with 15+ years experience currently in a top insurance firm. I couldn't quit earlier as I needed to sort out my british citizenship

How was citizenship an issue?

[andynags]

First time contractor, will be hard to convince the agent that you serious, put it this way, with the contract market shrinking as much as it has, what would you do? Experienced contractor or untried newbie?

You can form a company same day, bank account a bit longer but you won't need that immediately esp if on 30 day terms.

What's your skill set if you don't mind me asking?

IT Architect with 15+ years experience currently in a top insurance firm. I couldn't quit earlier as I needed to sort out my british citizenship

[SteelyDan]

First time contractor, will be hard to convince the agent that you serious, put it this way, with the contract market shrinking as much as it has, what would you do? Experienced contractor or untried newbie?

^ +1 on this.

Not wishing to knock your confidence, but it's [always] difficult getting the first gig, especially so given the points which stek alludes to.

What's the motivation for shifting to contracting? Might be worth you asking yourself this question so as to avoid 'rose-tinted specs' type of view. It can be tough, and in no way is it plain sailing. Setting up the Ltd Co is the easy bit; making a success of it is not so easy.

[stek]

Thanks Stek. Why is that so?

Also, will there be time in forming the company and all associated operational matters after securing the first contract? How do the agencies view the delay?

First time contractor, will be hard to convince the agent that you serious, put it this way, with the contract market shrinking as much as it has, what would you do? Experienced contractor or untried newbie?

You can form a company same day, bank account a bit longer but you won't need that immediately esp if on 30 day terms.

What's your skill set if you don't mind me asking?

[andynags]

I think you're being over optimistic re that first contract, two/three months is more realistic unless you are Gods Gift....

Thanks Stek. Why is that so?

Also, will there be time in forming the company and all associated operational matters after securing the first contract? How do the agencies view the delay?

[stek]

I think you're being over optimistic re that first contract, two/three months is more realistic unless you are Gods Gift....