Anybody done contracting work?

PapaLazaru

PapaLazaru

PapaLazaru

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I am starting a 6 month contract in a couple of weeks and have been mulling over whether to do the invoicing all myself and doing my own tax return, or paying an umbrella company to sort it all out.

I will be getting a flat fee per day and will not be looking to claim any extra stuff.

Has anybody got any advice? It would be most appreciated. :)
 
Only 6 months or looking for it to be a longer term thing?

Personally I'd say go umbrella as you can make more money and it's easier. Take a look at sanzar solutions, I was with them for near on a year, made more (% wise) than doing my own business for a year :)
 
britboy4321 said:
Go umbrella for 6 months.

Longer term, you'll make more money setting up a company as long as you can get around IR35.
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That depends on risk more than anything. I made around 10% more through sanzar than I would have through my company. Also it's a lot less work and worry when someone else is doing it for you :)
 
Think very carefully before using Sanzar / Montpellier et'all.

Yes the temptation of retaining >85% of gross is tempting but with the recent court ruling in favour of HMRC with BN66 (suggest you read up on it) means that HMRC will now move to monitor, close and recoup all tax "owed" since 1987 by people using different off-shore schemes. You would be better going with a standard UK umbrella for 6 months and seeing if contracting is right for you before operating through your own Ltd.

Lots to read over here :

www.contractoruk.com (pop in and say hi).
 
Morba said:
That depends on risk more than anything. I made around 10% more through sanzar than I would have through my company. Also it's a lot less work and worry when someone else is doing it for you :)
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Yes the main advantage to umbrella companies is the IR35-less state of the things. This is a loophole which the government keeps promising to close but never gets around to ..

You can probably get even better if you go out-of-EU offshore. A few people talked to me about this but to be completely honest I didn't have the bottle to do it (Moving money in and out of 'The bank of Guyana' with an account number which isn't even linked to my name, just a password, ain't my idea of fun).
 
Well I have spoken to a good accountant and they state I can go it alone.

If they extend the contract I may need to do something else but what is to stop me invoicing myself and doing my own tax return?

The rate I am billing is still ok for me to trade as myself.
 
If you get less than £50K a year you can be a sole trader, but I wouldn't recommend it. Firstly it means you don't charge VAT so can't claim VAT back on any company purchases. But secondly and more importantly it means you have unlimited liability. This means if you screw up, the company can theoretically say 'right, give us your PC and your computer games and the carpets from your house to sell, to make up for the money you cost us' and the court can agree!

Would you 'go it alone' as sole trader or as limited company?
 
Are you direct with the client or is the role through an agency?

If it is the latter, the agency will not touch you with a barge pole if you want to go in as a sole-trader. It will be either operating through your own Ltd or through an umbrella.

Another site I direct contractor-newbies to is here http://www.pcg.org.uk/cms/index.php
 
Well I have no VAT purchases to make and am just under the £50k threshhold.

I will just basically be billing weekly for x amount. Nothing more, nothing less. Just for my services as agreed.

I know I need insurance but it does not appear to cost much for the levels they have advised.
 
The thing is I must have known and worked with over 500 contractors in my life.

I have never met one that wasn't either 'umbrella company' or 'limited company'. Not a single 'sole trader'.

So beyond the specifics, being a sole trader would just be wierd. It might even freak the client or agent out. I think the legal 'sole trader' status is more intended to be for people doing 2 days window-cleaning a week, or selling fruit down the market, or washing cars. It's not really meant for a professional.

So, beyond the technicalities of why to not be a sole trader, if you want to fit in rather than be the wierd bloke who has to be treated diffent and whose invoices look different from everyone else's, why not just go for an umbrella?
 
britboy4321 said:
why not just go for an umbrella?
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Costs mainly. I just don't like paying for something I can do myself, in this case my own tax bill.

Saying that, I have been doing some digging through http://www.umbrellasupermarket.com and found http://www.carringtonaccountancy.com/. Good reviews and their fees are £15 a week gross.

I spoke to a lady there who was very informative. Say's I can claim my train fares and a few other bits and pieces which they will take care off.

She may have me sold, especially as they are a lot cheaper than some of the bigger companies. :)
 
You can only claim for things against the norm. So train to normal base of work shouldn't be claimed for.
 
Morba said:
You can only claim for things against the norm. So train to normal base of work shouldn't be claimed for.
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Assuming your business is registered to your home address then you're travelling to a client site whenever you travel to a different office to work though, so this is a valid expense.
You can't claim for more than two years of travel to the same place though so had you been contracting at the same location for several years this wouldn't be valid.
 
Not quite. If your home is your office but you are on site every day then it would be classed as your normal place of work (the Company you are contraced to's office that is).
 
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