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Umbrella or PLC?

Discussion in 'Employment & Jobs' started by skulkerboyo, May 28, 2011.

  1. skulkerboyo

    skulkerboyo Megabyte Poster

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    Hi there
    I'm returning to the U.K for a few months on holiday and have been offered contract work with my old company whilst I am there.

    Good stuff, but? What is the best way to play this? I'll only be there for a few months and working for about 4 weeks. I've been out of the country for a year and wouldn't earn enough to be in the tax bracket, I guess?

    My question is:
    Which would be the best option to earn more money. Find an umbrella company for the few weeks I am there or register as a plc an and invoice them directly?

    Anyone want to chime in? Registering as a plc doesn't look expensive but it's all in the detail I guess.

    If you were in a similar position, what would you do?
     
    Last edited: May 28, 2011
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  2. dmarsh

    dmarsh Terabyte Poster

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    You could also operate as a sole trader, so consider that.

    Limited company only really worth it if you intend to operate it on an ongoing basis as costs are fixed and annual. Must file accounts every year etc.

    With a Ltd you must pay corporation tax, with a company you need to think about how companies operate, not just personal income tax.

    You won't be a PLC as your shares won't be publicaly listed.
     
    Last edited: May 29, 2011
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  3. michael78

    michael78 Terabyte Poster

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    lol nowt like having a bit of faith in yourself but it's early days before you float on the stock market. Anyways it's not expensive to setup as a Ltd company (think it was around £50) but you need to be making £18+ an hour for it to be worth it otherwise go down the Umbrella route. When I was making that kind of money I setup a Ltd company and then scrapped it straight away as it was a big headache for me with all the in's and out's of tax law and what you could and couldn't do and claim.

    My advice would be start off with an Umbrella company and if you end up doing contracting long term then move to Ltd after 6 months. Reason being if you start a contract and you go perm then it can be a pain to sort out your tax. Also if your hovering at around the £18 mark again I don't think it's worth the extra headache of sorting tax out even with hiring an accountant.
     
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  4. skulkerboyo

    skulkerboyo Megabyte Poster

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    Cheap shares to the first 10 certforums members that PM me:twisted:

    Looking at sole trader as an option. Anybody know any good umbrella companies though? I've looked at a few and . . . well. . . they all claim to be good
     
    Certifications: MCITP:SA, MCSA 03, MCSA 08, MCTS(680+648),A+,N+,ITILV3 Foundation, ITIL Intermediate: Operational Support and Analysis
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  5. SimonD

    SimonD Terabyte Poster Moderator

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    Have a look at Paystream, I have used them for years and tbh they have been decent. (I haven't had the urge to change at least).
     
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  6. michael78

    michael78 Terabyte Poster

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    I can recommend GoUmbrella. Was with another Umbrella company for years (won't name them) and found they were giving me false information bordering on fraudulent advice. GoUmbrella sometimes do a first contract free regardless of the duration and I've found them to be good and their online system for expenses and such good. I came out with less that the other lot but knew I was legal. Moral of the story is don't just go with whoever says you will come out with the most money per week/month as you may have a nasty surprise off the taxman.
     
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  7. drum_dude

    drum_dude Gigabyte Poster

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    If you go Ltd, then be prepared for the huge amounts of paperwork that arrive on a monthly basis from the Inland Revenue. They're very quick off the mark to issue fines if you're late in filing NI contributions etc. I would advise that you spend some time looking for an accountant to take care of that side of things...unless you quite fancy doing it yourself. I do know of some IT contractors that quite enjoy doing their own books. The following site provides excellent spreadsheets for the DIY accountant: DIY Tax Accounting Software, Payroll Software, Company Formation UK

    Obviously, doing it yourself could be a headache and of course there is this thing called IR35 to consider too! Hiring an accountant may eat up too much of your cash.
     
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  8. Apexes

    Apexes Gigabyte Poster

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    If it's only a few months i'd go for umbrella, the hassle of setting up your own LTD company, and the paperwork, tax returns, insurance and crap like that will make it a bit crud.
     
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