Contracting Newbie

[cmscotland]

Hi everyone, first post on here, I'm making my first move into contracting having been offered a role with RBS and I'm a bit conflicted by the different options of Umbrella v Ltd and also the sheer volume of choice in Umbrella Suppliers / Contractor Accountants.

I was initially going to just go for an umbrella to make life easier but I've been thinking that with the tax benefits of a Ltd it might be a better option, especially as it seems there are plenty of services out there to help with the setup and then the accounting, really just wondering if I am looking at a Ltd Co are there any really good companies/services that I should be going to in regards to Company Formation and then the on-going accounting?

Thanks folks,

Chris

[administrator]

Hey Chris,

Thanks for joining the forum, welcome to the world of contracting!

How long is your initial contract? Do you intend to stay contracting? If the length of the contract is 6 months or more and you feel that you are likely to look for contracts after this initial one and not jump straight back into permie then Ltd Co is probably the better option. I say probably as it also depends on the IR35 friendliness (or not) of your contract.

Have a look here for a range of specialist contractor accountants:
Directory of Contractor Accountants - accountancy services providers for IT contractors :: Contractor UK

A lot of them offer company formation and bank account set up etc so contact them, read some of the threads on the forum and Google about them and you will be in a good position to make an informed choice on who you decide to appoint.

A quick note, this forum gets very well indexed by Google and using your name is not always handy, so if you want a different username then just send me a private message

Kind Regards

Admin

[cmscotland]

Thanks for the reply!
Initially it is a short contract but I'm intending to do this long term really I feel at the moment that its going to give memore flexibility and broaden my experience.

I will take a read over that and see what I think!

[administrator]

If it is a short contract then bear in mind the costs and extra work involved in the ltd co route. You will need to submit year end accounts etc and deal with bank accounts so they are more work initially but a far better structure for long-term contracting. Any questions just post them in the relevant forum (accounting/legal or business/contracts) and I am sure you will get some good responses. Good luck and congrats on landing the initial contract

[northernladuk]

Welcome to the forums.

There is a Limited V Umbrella sticky post explaining the exact differences and cost differences
http://forums.contractoruk.com/umbre...composite.html

There are plenty of take home calculators to show comparisons via google or in the list to the right.

There are also a whole host of newbie guides to the right you need to understand, particularly IR35 for now as well as how LTD's work etc..

I personally started with Umbrellas knowing they wern't the best but were very easy to use so I could get used to my finances and contracting slowly. Used them for around 6 months I think and then went LTD when I knew a little more and at my own pace. Might have lost a bit of cash from the outset but I didn't cock up or get put off.

Many other guys will tell you to grow some and jump in to LTD which is possible, many do, just depends on how stressed you feel so up to you.

Good luck.

[TestMangler]

Welcome to the forums.

There is a Limited V Umbrella sticky post explaining the exact differences and cost differences
http://forums.contractoruk.com/umbre...composite.html

There are plenty of take home calculators to show comparisons via google or in the list to the right.

There are also a whole host of newbie guides to the right you need to understand, particularly IR35 for now as well as how LTD's work etc..

I personally started with Umbrellas knowing they wern't the best but were very easy to use so I could get used to my finances and contracting slowly. Used them for around 6 months I think and then went LTD when I knew a little more and at my own pace. Might have lost a bit of cash from the outset but I didn't cock up or get put off.

Many other guys will tell you to grow some and jump in to LTD which is possible, many do, just depends on how stressed you feel so up to you.

Good luck.

Come on NLUK. You're letting the side down !!

You missed "Read the newbie Guide Here -------------------> "

[MarillionFan]

Come on NLUK. You're letting the side down !!

You missed "Read the newbie Guide Here -------------------> "

He's on a last warning.

[northernladuk]

Come on NLUK. You're letting the side down !!

You missed "Read the newbie Guide Here -------------------> "

WTF

What is this then???

There are also a whole host of newbie guides to the right you need to understand, particularly IR35 for now as well as how LTD's work etc..

Am bored so I thought I would put some more flouncy words in than normal but it does the jo... doesn't it??

[Clare@InTouch]

Hi Chris,

Whether you decide on limited or brolly depends on your situation, including the length of time you'll be contracting and the money you'll be earning. As a general guide, contracting over 6 months with annual income of at least £30,000 makes a limited worthwhile from a tax point of view. There's a bit more admin involved, but any decent accountant will talk you through it and hold your hand as much as necessary.

Many accountants will help with the incorporation and the VAT & PAYE registrations. You'll be looking in the region of £100 for all of that, don't pay more. Some companies will charge separately for CT registration (which happens automatically!) and VAT & PAYE registration, so make sure you know what you're getting up front. I've known people pay £500 for incorporation when they could have got it for so much less.

Call a few accountants, make sure they advise on set up, shares (including issuing shares to your wife if applicable), expenses, taxes and IR35. Find one you're comfortable with as you'll need to be happy you can call or email them with anything and everything that comes up. Call more than one so you can compare advice and personalities

[BrilloPad]

A quick note, this forum gets very well indexed by Google and using your name is not always handy, so if you want a different username then just send me a private message

Kind Regards

Admin

Are you trying to tell me that Administrator is not your real name?