Contracting

PapaLazaru

PapaLazaru

PapaLazaru

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Joined
23 Dec 2009
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I wonder if anyone can help.

To cut a long story short, I may be very shortly employed by a large mobile phone company in their fraud department to cover backlog.

6 month contract and the daily rate is pretty impressive.

I have been told that if I get the position I will need to set up a company for the tax liability.

I want to keep it as simple as possible so not interest in going Ltd.

What do I need to do to set up as a sole trader and how am I going to sort out NI & tax?

Also, will I be able to stick my commuting costs on my VAT return?
 
If you're a sole trader you won't charge or pay VAT. Or be able to claim a sodding thing through 'the company' as you won't have a company!

If you'll make more than £50,000 in a year through the company you can't be a sole trader.

Oh also you have personal liability for your work .. which means if they sue you (even if you make an honest mistake that costs them money), they can get big burly men to break into your house and take your tv and microwave oven.


Have you decided whether you're going to be IR35 liable or not yet?
 
Last edited:
britboy4321 said:
If you're a sole trader you won't charge or pay VAT. Or be able to claim a sodding thing through 'the company' as you won't have a company!

If you'll make more than £50,000 in a year through the company you can't be a sole trader.
Click to expand...

Well that's rubbish. A sole trader has no seperate legal distinction between company and individual, so all assets of the person are assets of the "company" and vice versa. There's no upper limit on earnings to be a sole trader at all. And you can claim VAT back, you just need to be VAT registered.

You may want to look into where this info came from as it's highly wrong!
 
Your only realistic option is via an umbrella company. Your whole income will be subject to:

Umbrella's fees
Employer's National Insurance
Employee's National Insurance
PAYE Tax

Most companies will not accept self-employed contractors as opposed to those working through another Ltd. company, whether it be a personal service company or an Umbrella company. They fear the exposure on the revenue going after them for your tax & NI contributions.

For a 6 month single company contract you'd more than likely have to work within IR35 anyway which means there won't be a massive difference between starting your own Ltd. and going via an umbrella. For the effort involved I'd probably go with the umbrella.
 
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