Reply to: Please help a newbie!

[northernladuk]

I think intention counts. If OP intends to have > 1 gig, but it doesn't work out that way then he's all good.

Yeah that gets mentioned whenever this comes up. Would be interesting to know how you prove intention though. No case history so guess we will never find out.

[TheFaQQer]

I'd say it doesn't apply, I doubt I'll visit the same location more then 5 times in a year. I read it as the 2 year rule is aimed at people working at the same physical location, ie. contracting in 1 building/site for more than 40% of your time?

I'd agree with you.

[Craig at Nixon Williams]

Just be aware if you go for a single gig with a brolly it automatically becomes your permanent place so no travel expenses are allowed. If you stay for more than one assignment then it's different.

This isn't unique to umbrella companies, the same rule applies if you have your own limited company. If you only expect to work at one location for the entire duration of the company's existence then that will not be seen as a temporary workplace and travel & subsistence shouldn't be claimed.

[mudskipper]

Just be aware if you go for a single gig with a brolly it automatically becomes your permanent place so no travel expenses are allowed. If you stay for more than one assignment then it's different.

I think intention counts. If OP intends to have > 1 gig, but it doesn't work out that way then he's all good.

[northernladuk]

Just be aware if you go for a single gig with a brolly it automatically becomes your permanent place so no travel expenses are allowed. If you stay for more than one assignment then it's different.

[confuzzled]

Having read up on the 2 year rule, what did that tell you? If you're going to be running your own company, it's basics like this that you'll need to know.

I'd say it doesn't apply, I doubt I'll visit the same location more then 5 times in a year. I read it as the 2 year rule is aimed at people working at the same physical location, ie. contracting in 1 building/site for more than 40% of your time?

[TheFaQQer]

All of the work is contracted to them from other places so does this get around the 40% in 2 years rule? I won't be working at any one place for more than a week it seems.

Having read up on the 2 year rule, what did that tell you? If you're going to be running your own company, it's basics like this that you'll need to know.

[DaveB]

I've been doing a little digging my colleague that originally recommended me to them, it seems I could be on ~ £150/day in 6-8 months if all goes well.

All of the work is contracted to them from other places so does this get around the 40% in 2 years rule? I won't be working at any one place for more than a week it seems.

It's starting to look a lot more attractive than I originally thought. I'm meeting my colleague over the weekend and will hopefully be able to gleam some more information from him...Although he hasn't actually contracted for them himself.

Thanks for all the replies so far guys, been very helpful. I'm definitely leaning towards the ltd company route now, but not rushing any decision until I've had the chat with my colleague & spoken to the client/agent, not really sure what to call them, again on Monday.

Thanks again!

I'd still go Brolly to begin with. It will give you a chance to get up to speed on how Ltd works, IR35 etc etc and get some experience under your belt for the next gig.

As and when you land a higher paying gig you can go ltd at that point. Any of the Accountants who hang around on here can get you set up quickly and easily if you don't fancy doing it yourself. Going brolly also means you don't need to set up a company bank account, which is what takes the time in the whole process.

[confuzzled]

I've been doing a little digging my colleague that originally recommended me to them, it seems I could be on ~ £150/day in 6-8 months if all goes well.

All of the work is contracted to them from other places so does this get around the 40% in 2 years rule? I won't be working at any one place for more than a week it seems.

It's starting to look a lot more attractive than I originally thought. I'm meeting my colleague over the weekend and will hopefully be able to gleam some more information from him...Although he hasn't actually contracted for them himself.

Thanks for all the replies so far guys, been very helpful. I'm definitely leaning towards the ltd company route now, but not rushing any decision until I've had the chat with my colleague & spoken to the client/agent, not really sure what to call them, again on Monday.

Thanks again!

[Craig at Nixon Williams]

No, the figures are for 44 weeks a year, £0 in expenses, so you'd have to put the accounting in there as well.

If you change the calculator to 52 weeks a year, £1200 in expenses, £7500 in salary then it gives you a monthly take home of £1778.

It doesn't factor in any additional startup and shutdown costs of only running a Ltd for a few months, though. I also haven't included any insurance costs that you'd need as a Ltd that you don't as an umbrella. Or the opportunity cost of the hassle of running the business for yourself, and debating whether the contract is going to be inside or outside IR35...

I have just done the calculation by hand, using the following assumptions:

• 44 weeks billing, 5 days a week
• No flat rate saving
• No expenses
• Next years tax rates & allowances

The take home would be £19,355 from a company and £16,757 from an umbrella (this excludes any fees, but accountancy fees and umbrella fees are quite similar). As you rightly say, it doesn't cover any fees associated with later closing a company, any start-up fees like insurances or indeed the opportunity cost of spare time used doing admin...

[TheFaQQer]

I would have thought that any accountancy or umbrella fees would be built into the figure, so that would £2 in your back pocket!

No, the figures are for 44 weeks a year, £0 in expenses, so you'd have to put the accounting in there as well.

If you change the calculator to 52 weeks a year, £1200 in expenses, £7500 in salary then it gives you a monthly take home of £1778.

It doesn't factor in any additional startup and shutdown costs of only running a Ltd for a few months, though. I also haven't included any insurance costs that you'd need as a Ltd that you don't as an umbrella. Or the opportunity cost of the hassle of running the business for yourself, and debating whether the contract is going to be inside or outside IR35...

[Craig at Nixon Williams]

ContractorCalculator gives a take home of £1394 a month on £100 a day. That equates to £348.50 a week

ContractorUmbrella gives a take home through them on £100 a day with no expenses of £346.61 a week

You're not going to get an accountant to do the paperwork etc. for £2 a week, so I'd be going umbrella at that rate (or permie on £21k a year)

I would have thought that any accountancy or umbrella fees would be built into the figure, so that would £2 in your back pocket!

[GazCol]

ContractorCalculator gives a take home of £1394 a month on £100 a day. That equates to £348.50 a week

ContractorUmbrella gives a take home through them on £100 a day with no expenses of £346.61 a week

You're not going to get an accountant to do the paperwork etc. for £2 a week, so I'd be going umbrella at that rate (or permie on £21k a year)

The contractor calculator works on the basis of calculating 44 weeks of the year - if this chap only has the intention of contracting for the duration of this (and potentially the next contract) the income has to be pro-rata'd to 52 weeks, that is where I got my figure of £1,800 from.

[TheFaQQer]

I wouldn't right off going down the Ltd route, provided contract and working practices are outside IR35 as even on circa £100/day the take home pay would be, roughly I add, £1,800 vs £1,400 pcm.

ContractorCalculator gives a take home of £1394 a month on £100 a day (link) That equates to £348.50 a week

ContractorUmbrella gives a take home through them on £100 a day with no expenses of £346.61 a week

You're not going to get an accountant to do the paperwork etc. for £2 a week, so I'd be going umbrella at that rate (or permie on £21k a year)

[GazCol]

I wouldn't right off going down the Ltd route, provided contract and working practices are outside IR35 as even on circa £100/day the take home pay would be, roughly I add, £1,800 vs £1,400 pcm.