Should I trade as a Limited Company, umbrella or composite

[ksareen]

As a reference if it helps, I have been with Darren Upton (Upton and Company Accountants) for nearly one year and have had brilliant support, information and excellent response time... never missed a date!

When I started my ltd company, I also found that fees between various accountant companies vary, but the net result is same (working out the taxes)!

With Upton and company, I got free company name, VAT registration, company bank account set up and great support from day 1.

[aussie_gal]

I've only just started contracting in IT however by looking at various websites and speaking to them also parasol, giant, norla, no longer limited, orange genie among various others, all i imagine offer similar solutions but when speaking to them they all blow their own trumpet which is fair enough. However what would be the best one??? Is this the route i should go down or is there better options
advice would be much appreciated

If it helps I have been contracting through Consultants Exchange (CXC) http://www.cxcglobal.co.uk
for a couple of years now and ive always found them really reliable and helpful. I know some of my friends have had real problems with their umbrella providers...always stuffing up their pays and misadvising etc so you should check CXC out...

Hope that helps!

[Fred Bloggs]

Large parts of this thread have been overtaken by legislation, particularly the MSC legislation and the Income Shifting legislation. Surely this thread needs some serious editing and updating?

[multiuk]

Hi Fred, can you (or anyone else) share what you know.

I agree, there is definitely a need for up to date info here and no better place than this sticky.

I am shortly thinking of going contracting and I intend to use an umbrella company ideally, or my own company.

Will be much appreciated.

cheers
multiuk

[malvolio]

The only thing that's changed is the MSC legislation. Since nobody is selling them any more (at least, not to newbies) they're hardly relevant. Income shifting hasn't happened yet, and your accountant will advise you anyway.

Enagage brain, get your own company.

[multiuk]

thanks malvolio, so I take it that both umbrella companies and Ltd companies are still legit then? I know that you should ideally get a contract drawn up to be outside IR35 if going with your own Ltd company but does that not matter for an umbrella.

Last I heard, everyone was saying that all were illegal and all you could do was run a Ltd to claim expenses, and that both umbrellas and composites were illegal.

And yet I work with many contractors who are currently using either (umbrella or Ltd).

It's all incredibly confusing.

[malvolio]

It's all incredibly confusing.

No it's not, it's perfectly simple. But before I go into the depths of explaining it all yet again, go read the First TImer guides we keep telling people to read, the one here, the PCG one www.pcg.org.uk You're also posting in the one thread that explains it all carefully and in great detail.

Also disregard you local contacts, they are clearly unaware of the real world or are simply winding you up. Stick to what the people on here are telling you.

And the next question you should ask is not "How does it all work then". You want to be a contrctor, start thinking (and finding out) for yourself.

[sozz7]

Brookson bad tax advice

From my experience of contracting with by both forming a Ltd company or not by using a unbrellas such as CPS, Atlantic etc, I would say avoid the Ltd route, companies such as Brookson will tell you how easy and risk free it is, but their advice is biased, if you don't have a 12 month contract and stop using Brookson within 12 months you will be left holding the baby, i.e. you will have to pay for Ltd company tax returns and £400 for cessation of accounts to close the company

Their figures don't add up, they don't include these costs when providing prospective clients with earning potential

[MPwannadecentincome]

I think I'm seeing the limitations of working for an umbrella and I've only been contracting a few weeks.

1) Parasol will not allow interview travel costs to be expensed - I'm sure this is a legitimate business expense after all what do sales people do all day?

2) If I take a contract working from home I cannot claim for anything other than itemised phone calls. I'm sure as a Ltd company I could expense a small amount per week, used to be around £18 per week a few years ago I think.

I've yet to discover other limitation....

[NotAllThere]

...
2) If I take a contract working from home I cannot claim for anything other than itemised phone calls. I'm sure as a Ltd company I could expense a small amount per week, used to be around £18 per week a few years ago I think...

No. You can ONLY claim expenses incurred, and get the tax deducted from corporation tax, if they are legitimate, receipted business expenses.

The advantage of ltd over brolly has been discussed many times. Go read the first timer guide.