Contracting

[lancsdave]

Not sure if I should have put this in this section or Q&A's

Does anyone work as an IT contractor, or even any other contractor for that matter. Just trying to get some ideas/advice on the umbrella/limited company scenario. I'm particlarly keen to hear from anyone who chose the limted company option. I'm sick of paying a wad of my money to an umbrella company but the limted company thing looks so complex.

 

[derekgas]

You get better tax breaks with a limited company, you take a premium rather than a wage, and pay less tax on that too, if you have been trading as a company and want to go limited, you have to change your bank acount and some of your suppliers will see it as trouble, the thought being that you are in difficulties and protecting your assets, you will need a chairman, director and treasurer (at least 2 people), and have to provide your books annually and on time to company house.

 

[accyroy]

Yup, I'm a contractor and have a Ltd company. Best advise I can give you is to get a good accountant, and have a good long chat with them about it.

 

[lancsdave]

You get better tax breaks with a limited company, you take a premium rather than a wage, and pay less tax on that too, if you have been trading as a company and want to go limited, you have to change your bank acount and some of your suppliers will see it as trouble, the thought being that you are in difficulties and protecting your assets, you will need a chairman, director and treasurer (at least 2 people), and have to provide your books annually and on time to company house.

I can understand the company scenario and the mistrust associated with it. An IT contractor is effectively a sole trader but most agencies won't pay you as a 'business' unless you are a limited company. Presumably this is all because of tax laws. The umbrella companies are a pain because as well as paying the normal tax and NI you also have to pay the emplyers NI yourself too.