Just started contracting - how should I set myself up ??

[cdgeorge]

OK I'm helping out my son here - he's been employed for 2 years and now is going to start contracting in ICT. He can either work under an umbrella company or set up as a Limited company - however I have no idea of the financials and registration involved in doing this properly - can anyone give me a starter for 10?

Thanks.

[cojak]

Welcome!

You'll find a lot of answers to your questions within the CUK website.

On the right you'll find CUK Navigation. >>>>>>>>>

Look down and you'll come to the First Timers section. Have a read through there.

Umbrella or Ltd? Look here: Setting up your company - Ltd or Umbrella?

Basic expenses questions answered here: Contractor Expenses - How to claim Travel and other expenses via Limited Company or Umbrella

Then pay particular attention to IR35.

And here are the rules when using company credit cards: http://www.hmrc.gov.uk/payerti/exb/a-z/c/cards.htm

If you go into the Accounting/Legal forum you'll discover the thread Basic advice when running your own contractor business.

Guide to Contracts also has some good articles.

Do you want advice on the state of the contract market for your specialism/location? Have a look at this website; it will answer most if not all of your questions: IT Jobs Watch, Tracking the IT Job Market

And finally - accountant recommendations - Ta-da!

Happy reading!

[Gumbo Robot]

From looking at your user id I was going to suggest a nice sexy basque with stockings and sussies.

[cdgeorge]

Thanks for the welcome - I'll take a look. A friend in the family (Chartered accountant) replied that he should set up as a 'sole trader'? Hmmm - not sure why he said that? I think it's because Sam (my son) is not going to earn enough (i.e. over 40K gross annually) to gain any significant benefits of a Ltd company.

However I know nothing - and need to start delving ....

[stek]

Thanks for the welcome - I'll take a look. A friend in the family (Chartered accountant) replied that he should set up as a 'sole trader'? Hmmm - not sure why he said that? I think it's because Sam (my son) is not going to earn enough (i.e. over 40K gross annually) to gain any significant benefits of a Ltd company.

However I know nothing - and need to start delving ....

Not possible unless he gives direct, practically impossible for a noob.

Agencies Act.....

[cojak]

Thanks for the welcome - I'll take a look. A friend in the family (Chartered accountant) replied that he should set up as a 'sole trader'? Hmmm - not sure why he said that? I think it's because Sam (my son) is not going to earn enough (i.e. over 40K gross annually) to gain any significant benefits of a Ltd company.

However I know nothing - and need to start delving ....

No agency is going to look at your son unless he either joins a respectable umbrella or goes Ltd.

[northernladuk]

Two years employment? Am guessing he's looking at service desk stuff with so little experience? I'd say contracting isn't the way to go. Might pay better for an equivalent role but you are going to severely stunt his career progession. I'd be pushing my lad to get better qualifications and get a job in a big firm that will allow him to grow his experience and find out what he really wants to do
In time when he's climbed the ladder and had enough experience he can contract on a much higher rate if he wants to. Contracting now is very shorttermist.

[cdgeorge]

The Home - The Campsite

OK he's looking to make the most of raking the money in while he can - but can you help me with the following.

Traveling expenses and the classification of 'home'. I know the letter of the law can be quite strict sometimes and therefore what does the taxman class as home? He is living in our house which is our home because he does not have a home of his own. Therefore when he travels from home (our home) to work - can he class our accommodation as 'home'?

The place where he is contracting from is 150 miles from our home (his home, however we want to label it) - so on Monday morning he will travel 150 miles down there and begin his working day. Monday night to Thursday night he will be 'camping' in a 'tent' to save on accommodation costs (hardcore I know). Then of course on Friday he will be traveling back to ours. This will be the routine to begin with.

So regarding travel expenses - to and from 'our home' which is his home too. And, travelling from the campsite (20 miles from the work place) - is this classed as his home while he is away? We want to take into account fuel costs/tax breaks to and from home/accommodation where possible.

[stek]

OK he's looking to make the most of raking the money in while he can - but can you help me with the following.

Traveling expenses and the classification of 'home'. I know the letter of the law can be quite strict sometimes and therefore what does the taxman class as home? He is living in our house which is our home because he does not have a home of his own. Therefore when he travels from home (our home) to work - can he class our accommodation as 'home'?

The place where he is contracting from is 150 miles from our home (his home, however we want to label it) - so on Monday morning he will travel 150 miles down there and begin his working day. Monday night to Thursday night he will be 'camping' in a 'tent' to save on accommodation costs (hardcore I know). Then of course on Friday he will be traveling back to ours. This will be the routine to begin with.

So regarding travel expenses - to and from 'our home' which is his home too. And, travelling from the campsite (20 miles from the work place) - is this classed as his home while he is away? We want to take into account fuel costs/tax breaks to and from home/accommodation where possible.

Yes, all expensible. Note, however, it's only the tax you save, not the whole expense, so £100 a week expenses still means you (or you Ltd/brolly) pay £80, it's not free money.

Bet he lasts two weeks doing that....

[northernladuk]

Set him. Up with a good accountant first. They will give all this information. Don't flail about blindly...

And just for the record I don't agree with your raking the money in comment for the reasons I mentioned earlier. He might be on what appears to be an amazing whack for his age now but he'll be on the same in 10 years time... Which he won't as contracting is slowly dying.

Each to his own though....