Reply to: variable rate contract and umbrella companies

[malvolio]

Thanks for all the replies. This particular contract does not involve an agency, however future contracts are likely to, so I want something that will work for both approaches, as I'm unlikely to go back to umbrella once I set up as sole trader/ltd/self-employed. Guess I'm not clear on best way forward - is discussing with an accountant the next best step ?

Given agencies won't deal with Self employed people, your own Ltd Co is the most flexible and cost effective solution. Go to www.pcg.org.uk and download the Guide to Freelancing. That will explain all the options

[berkleyn]

ughh!!

I've been offered a new contract which is atypical in as much as the work is piece-meal and the amount paid will vary according to the piece of work. Therefore, I will not have a fixed hourly or day-rate. I have used umbrella companies in the past so was planning on doing so again, but have been told by two umbrella companies that they cannot handle this type of contract. I am unclear whether this is to do with their systems, or whether there is a legal issue, as this was alluded to. Can anyone advise whether there is an option to use an umbrella for this type of contract or whether my only option is to go down the limited company route. Thanks in advance.

Thanks for all the replies. This particular contract does not involve an agency, however future contracts are likely to, so I want something that will work for both approaches, as I'm unlikely to go back to umbrella once I set up as sole trader/ltd/self-employed. Guess I'm not clear on best way forward - is discussing with an accountant the next best step ?

[geoff from contracta IOM]

so what's the relationship between the Ltd Co and the sole trader? B2B presumably??

Sorry yes B2B

[LisaContractorUmbrella]

I the the sole trader is registered as self employed, can provide a UTR number and give a declaration that they will declare all the income to HMRC then we are happy to work with them.

so what's the relationship between the Ltd Co and the sole trader? B2B presumably??

[geoff from contracta IOM]

Oh OK - so what's the relationship between the Ltd Co and the sole trader? B2B presumably??

I the the sole trader is registered as self employed, can provide a UTR number and give a declaration that they will declare all the income to HMRC then we are happy to work with them.

[LisaContractorUmbrella]

Thats correct Prozac, Lisa KUATB

Oh OK - so what's the relationship between the Ltd Co and the sole trader? B2B presumably??

[geoff from contracta IOM]

My understanding of the structures of the EBT replacements is:

Agency -> Contracta Ltd Company -> Self Employed Person.

Thats correct Prozac, Lisa KUATB

[prozak]

I need a bit more of an explanation for that to make sense Prozak

My understanding of the structures of the EBT replacements is:

Agency -> Contracta Ltd Company -> Self Employed Person.

[geoff from contracta IOM]

I need a bit more of an explanation for that to make sense Prozak

If you read my earlier post Lisa you will see that we can handle someone who is self employed and the OP's agency would need to be in agreement with this.

[LisaContractorUmbrella]

Yes they usually can.

Geoff's structure is likely to have a company in-between the agency and self-employed person.

I need a bit more of an explanation for that to make sense Prozak

[prozak]

Not if the OP has secured his contract through an agency

Yes they usually can.

Geoff's structure is likely to have a company in-between the agency and self-employed person.

[LisaContractorUmbrella]

We can

Not if the OP has secured his contract through an agency

[geoff from contracta IOM]

If the contract is with an agency you will have no choice but to go Ltd (assuming brolly is off the agenda) - they can't deal with self employed people

We can

[simondolan]

I've been offered a new contract which is atypical in as much as the work is piece-meal and the amount paid will vary according to the piece of work. Therefore, I will not have a fixed hourly or day-rate. I have used umbrella companies in the past so was planning on doing so again, but have been told by two umbrella companies that they cannot handle this type of contract. I am unclear whether this is to do with their systems, or whether there is a legal issue, as this was alluded to. Can anyone advise whether there is an option to use an umbrella for this type of contract or whether my only option is to go down the limited company route. Thanks in advance.

If the contract is with an agency you will have no choice but to go Ltd (assuming brolly is off the agenda) - they can't deal with self employed people

[Clare@InTouch]

A limited company could be an option, but it depends on the level of income. Really, it's only worth it if your annual income is going to exceed around £30,000.

How about self employment? A lot of agencies won't allow it, but if you can contract direct with the client then it may be an option. It's better than PAYE as you'll save a bit of NI, plus it's then just a case of preparing a tax return each year.