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  1. #1
    aka Cap'n Carl Firecrotch Westdene Seagull's Avatar
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    One for the IT contractors on here ....


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    I'm in for a chance of getting an six month IT contract. Obviously I'd like to get paid but need to be paid through either a limited company or an umbrella company.

    The contract will start almost immediately if I'm successful so setting up a limited company in the short term would be close to impossible although long term may be worthwhile.

    So that leaves me having to use an umbrella company. Do any of you use this method ? If so, what should I be looking out for ( pitfalls etc ) ? What should I expect to pay ? Any recommendations for who I should go with ?
    BAN Village Idiots
    The devil whispered in my ear : "You're not strong enough to withstand the storm."
    I whispered in the devils ear : " I am the storm."

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    • #2
      The Disowned Masses
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      You can setup a limited company online in 3 hours. The bank account comes next (Santander are apparently the best), and then you need to get VAT registered and take out liability insurance. The whole thing will only take 2 weeks.

      I'm doing the same currently.
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    • #3
      Members Tricky Dicky's Avatar
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      Quote Originally Posted by Westdene Seagull View Post
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      I'm in for a chance of getting an six month IT contract. Obviously I'd like to get paid but need to be paid through either a limited company or an umbrella company.

      The contract will start almost immediately if I'm successful so setting up a limited company in the short term would be close to impossible although long term may be worthwhile.

      So that leaves me having to use an umbrella company. Do any of you use this method ? If so, what should I be looking out for ( pitfalls etc ) ? What should I expect to pay ? Any recommendations for who I should go with ?
      J
      I was contracting 3 years ago and wanted the solution of least hassle. My agency suggested one umbrella company, it took quite a long time on the phone answering questions to set it up, but after that I had to do nothing and got paid as if I was perm, no hassle at all.

      Of course you pay for the service, but I thought it was cheap for something so simple and convenient. From memory my contract was £800 per day but the fee was something like £16 per week (I think), so pretty insignificant in the scheme of things.
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    • #4
      The Disowned Masses
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      If you do have to use an umbrella, Tarpon are well regarded.
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    • #5
      NOT the Honey Badger Badger's Avatar
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      I use a limited company and it is by far the most tax efficient method. I'm not sure why you say it would be impossible to set up a limited company, it takes a matter of hours to set it up initially and everything should be in place by the time you get your first payment. I would recommend using an accountant that specialise in this area, I do all mine through Crunch Accounting, they set everything up for you and give you access to software to record all your sales and expenses.
      People like Coldplay and voted for the Nazis. You can't trust people.
    • #6
      aka Cap'n Carl Firecrotch Westdene Seagull's Avatar
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      Quote Originally Posted by Badger View Post
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      I use a limited company and it is by far the most tax efficient method. I'm not sure why you say it would be impossible to set up a limited company, it takes a matter of hours to set it up initially and everything should be in place by the time you get your first payment. I would recommend using an accountant that specialise in this area, I do all mine through Crunch Accounting, they set everything up for you and give you access to software to record all your sales and expenses.
      Thank you all. I'll look at a ltd company. I've always heard good things about Crunch and Darren Fell is a very down to earth bloke so I'll probably do it your way Badger.
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      The devil whispered in my ear : "You're not strong enough to withstand the storm."
      I whispered in the devils ear : " I am the storm."
    • #7
      Members Herr Tubthumper's Avatar
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      Quote Originally Posted by Westdene Seagull View Post
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      Thank you all. I'll look at a ltd company. I've always heard good things about Crunch and Darren Fell is a very down to earth bloke so I'll probably do it your way Badger.
      Ltd is the best way IMHO. And takes next to no time to set up if you take an off-the-shelf company. Also look into flat rate VAT.
      "I will design a town in the image of your face. Round the wrinkles of your eyes my footsteps you can trace. We could promenade down infra-nasel depression. The streets of your hands will never feel a recession."
    • #8
      NOT the Honey Badger Badger's Avatar
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      Quote Originally Posted by Westdene Seagull View Post
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      Thank you all. I'll look at a ltd company. I've always heard good things about Crunch and Darren Fell is a very down to earth bloke so I'll probably do it your way Badger.
      They make things very easy. You need to have a few conversations with them to get everything set up, then after that there's very little admin, you just need to enter sales/expenses/salary into their software and they'll send you an email (followed by reminders) if you need to do anything tax related e.g. VAT returns. They also tell you about expenses you are entitled to claim when they do your end-of-year company accounts and for a fee they'll do your personal tax return too.
      People like Coldplay and voted for the Nazis. You can't trust people.
    • #9
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      I'm in the process of doing this, Brooksons are the accountants I chose and they sorted out all of my insurances as well. They'll take care of all tax/VAT issues for both my personal returns and the company and handle all the usual expenses, invoicing etc. They also get a direct feed from my company bank account daily so I can view my accounts fully from a single portal.
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    • #10
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      Do not believe, in any way shape or form, the figures of "what you'll be able to claim as tax-free expenses" that any umbrella company tell you. If you even try HMRC will be after you.

      I did all mine through a Ltd (albeit in a different jurisdiction) mainly because I found the sales pitches of the umbrella firms nauseating more than anything else; its not a huge effort and is more cost effective. Just becomes annoying when you're no longer contracting.

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