Is it worth setting up a Ltd company for a 3 month contract?

[PerfectStorm]

If it was for a decent rate I'd say yes - most contracts extend if you're good, and you'll find a way to be good for that money.

Not for £150 though.

[michalini]

I would be very suspicious of anybody ever offering me this day rate and their intentions.

How do you know it's not his first job? So starting pay would be lower. Sure, the real day rate might be £350, but you get what you negotiate. Also, assuming it's his first job I wouldn't pay more than £200 for a junior, would you?

after administration costs, at minimum wage

Try calculating that again. More like ~£2300 a month.

Edit: formatting, because it's late and I can't type.

[agentzero]

No.

Your day rate is, after administration costs, at minimum wage. What is this job? I would be very suspicious of anybody ever offering me this day rate and their intentions. My advice, from my old younger self, is to find more about the role and then try to go direct with the end client. It sounds like a chain of agencies are involved and the real day rate will be at least £350 per day.

[hobnob]

I agree with what everyone else said - it's not worth setting up a company just for this.

However, I wanted to address this point:

This assumes that the client/agency are paying their own employment taxes, and not passing them onto you.

I'd be very wary about making that assumption. You need to talk to the agency and get that point clarified before you sign anything. My guess is that they'll pay £150/day to the umbrella company, who will then deduct employer's NI.

[jamesbrown]

Absolutely not.

[ladymuck]

No. Not at that day rate or contract duration.

[RuddyNorah]

Hi,

I've been offered a 3-month contract at £150/day outside IR35.

I've been given the choice of using a Ltd company or going through an umbrella company.

I've run an online calculator to see what the difference would be and it seems minimal ..

• Your current net monthly income after taxes is £2,247.
• If you are assessed as a deemed employee ("inside IR35") then your earnings are treated as employment income (i.e. like a salary).
• Your monthly net income then decreases £41 (1.86%) to £2,205. This assumes that the client/agency are paying their own employment taxes, and not passing them onto you.

I called an accountancy firm and they said basically the same thing, it's financially not worth going Ltd company unless you are earning £50-60k gross

If the client are liable for their own NI contributions anyway, is there any benefit to going down the Ltd company route?