Sole Trader to Umbrella

[MrNiceGuy]

I have been a self-employed web designer for many years (no contracting) and will be starting a part-time, short-term contract soon for an initial 3 months.

It seems sensible to operate within an umbrella company but I still have customers who I provide web design services for as a sole trader. If I move to an umbrella company, can continue to I serve my current customers and work the contract at the same time? Has anyone encountered this situation or can advise the best course of action.

Thanks

[Numbermill]

No reason why not. When you engage with us Umbrella's, you become an employee of the Umbrella company.

There's nothing to stop you having a second line of income on a self-employed basis as long as all income is reported in your self-assessment form at the end of the year.

One thing to watch out for is that whichever Umbrella company you register with should be paying you within a few £'s of whatever any other Umbrella company is paying you. The tax treatment should be the same so theoretically it's only their margin and service which should differentiate them. If you get offered "wow, look, 85% retention" then walk away.

Other thing is that your agency may have a preferred list of Umbrella's they're willing to engage with. Your ability to choose outside of this list varies hugely by agency.

Best of luck with the new project.

Rob@Numbermill

[MrNiceGuy]

Hi Rob,

Many thanks for the information and advice.

It's very much appreciated.

[SeanT]

If you're already running a legit business with a number of clients, I'd question why you're going down the umbrella route and not limited company, unless the short term gig you refer to is public sector && IR35 caught?

[lucyclarityumbrella]

I have been a self-employed web designer for many years (no contracting) and will be starting a part-time, short-term contract soon for an initial 3 months.

It seems sensible to operate within an umbrella company but I still have customers who I provide web design services for as a sole trader. If I move to an umbrella company, can continue to I serve my current customers and work the contract at the same time? Has anyone encountered this situation or can advise the best course of action.

Thanks

Hi MrNiceGuy
It would be dependent on how you gained the part time work, if you used an agency then you will need to operate via a brolly or Ltd company, if you gained the work direct with the client with no agency involved then you can still operate as self-employed unless the end client has an issue with it.

You are able to work self-employed and via an umbrella at the same time yes, all you will need to do is when you complete your self-assessment for the self-employed work, you wll need to declare the PAYE earnings from the P45 issued by your brolly at the end of the employment, but don't worry as long as the umbrella is operating properly then there will be no additional taxes to pay on the "employed" income.

As mentioned previously, it may be worth looking into the Ltd side of things too rather than self-employed. If you need any further help / advice, let me know.

[gables]

If you're already running a legit business with a number of clients, I'd question why you're going down the umbrella route and not limited company, unless the short term gig you refer to is public sector && IR35 caught?

It could be that, or as he's a Sole Trader he currently doesn't have a ltd and for a short term contract maybe not worth setting up??