Limited company or umberella

Yorkieboy70

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Have the chance of getting a contract. As it might be only short term is it better to set up a Ltd company or work under an umbrella company. It would involve working from home so there would be expenses to claim.

YB
 

Nobby_nobbs

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It depends on the length of the contract and if you plan doing contract work for a long period.
I use an umbrella just for ease really, you can still put expenses in to the umbrella company and they will sort it out for you.
On my last contract I claimed mileage as I was going in as a consultant, and nobody in the company could do the work I was doing.
Best thing to do would be start under an umbrella and if it takes off go limited
 

brian carragher

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Have the chance of getting a contract. As it might be only short term is it better to set up a Ltd company or work under an umbrella company. It would involve working from home so there would be expenses to claim.

YB
What is it you're intending to set up as, you're obviously going through an agency but there are other options depending on what it is you're going to be doing
 

Yorkieboy70

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It's a 6 -12 month contract in IT. I used to do it years ago but near home so just went under umbrella. This time I would have expenses of fuel and accommodation.
 

brian carragher

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Going Umbrella you won't be able to claim any expenses working from home unless you're buying new kit or work related items you need to work with
If you have to drive to a place of work other than home you cant claim for fuel but you can claim for mileage travelled, check your umbrella company as some Umrellas' dont allow you to claim for travelling both ways, usually at 45p per mile for the first 10,000 miles then the rate drops
Accomodation away from home can be claimed along with meals away from home

Ltd company might not be the best deal if your contract only lasts for 6 months, long term contracts might benefit with Ltd company status but you will be an employee of the new Ltd company so you will need new accounts to pay monies into and employers and public liability and an accountant at the end of any trading periods

Just a quick round up but for clearer advice I'd speak to an accountant about the benefits of Ltd company, dividends used to be payable quarterly from a ltd account to an employee/owner/proprioter whilst claiming a low wage enabling that person to claim top up benefits
 

Nobby_nobbs

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One of the first things is check with the company you are contracting for as some don’t like Lyd company contractors, especially anything connected to the government.
Think this has lot to do with IR35, that is one reason I went umbrella through an agency, a good one can keep an eye on the taxman.
As Brian has said you won’t be able to claim everything for working from home.
But you may be able to claim something for heating, lighting, and phone but check with either the umbrella company or accountant first.
To claim mileage for one contract I had to provide a fuel receipts, and you have to be independent in your work and not supervised.
 

Yorkieboy70

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There will be no working from home as you have to be on site. So will need 4 nights accommodation and travel there and back 160 ish miles plus meals. 4 on 4 off shift pattern
 

spark1

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Working Limited is going to be hammered from April 2020 in the private sector like the public is. The onus under IR35 is being put on the main contractor or agency to prove your not working as such as employee's do. In other words if your doing the same job as someone on the cards then you need to be paying the same Tax and NI.

One criteria is: you need to able to send someone else in to do your job if you can't ie holiday, sick etc
 

muskrat

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Under IR35 you can be doing everything possible to conduct your business like a true limited company under contract. But the taxman can arbitrarily 'deem' that you ain't and you get lumbered with full employee-like tax liability. That's why a lot of these umbrella co's sprung up.

Be careful out there!
 

angel

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One criteria is: you need to able to send someone else in to do your job if you can't ie holiday, sick etc

Not strictly true you have the RIGHT to send another operative in.
Your agency should have no problems wording your contract to clarify that you are not an employee.
There have been several attempts to scupper Ltd contractors over the years eg. The inappropriate use of IR35. There are no hard and fast rules because HMRC is incapable of legislating a rock solid catch all rule, it comes down to burden of proof.
If there is no-one else able to do your job then thats a big plus for you.
 

rudd

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Cant answer this as work for one of the big four and under contract!😇
 
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