CC

Hi

I'm throwing caution to the wind and quitting my permy job to go it alone in IT contracting.

Two reasons - 1. Dislike the job I'm in now and 2. The contract I've been offered is double the hourly rate what I'm on now.

I've not setup my own limited company so I've been advised to join an 'umbrella company' who'll look after NI, Tax etc.

After a quick search on google I've come across a plethora of companies offering this service and so I'm not sure who to go with.

Can anyone recommend an umbrella company or atleast guide me on what to look out for? Also, what are the advantages of forming my own limited company?

Many thanks...

simon_prickett

Quite a timely posting, I'm currently owed 7 weeks cash by one of the umbrella companies... I'm not naming them until I get paid.

Basically I went with the umbrella as I was forced into contracting at a time when I also had a young child and was moving house. The umbrella pays me minimum wage as a PAYE employee plus expenses incurred (food, mileage etc) then the rest of my salary as a bonus - making it pretty light on tax.

Payment is determined thus:

I put in timesheets for hours worked.

Umbrella collects money being hourly rate x hours worked

Umbrella keeps this until the end of the month

I put in an expense claim to the Umbrella

Umbrella pays me minimum wage x hours worked - this incurs tax/NI. They then (if my income as collected by the umbrella covers it) pay me the expenses tax free and the remainder of the income as a bonus (which attracts tax)

Umbrella keeps a percentage and provides all my liability insurance

I manage all my own pension contributions

Advantages: I just fill out timesheets, and am basically a PAYE employee which makes self assessment forms easy to do and I can't be had up for IR35 infringement.

Disadvantages: I never know when/if the umbrella has collected money on my behalf - due to their slackness, I'm now 7 weeks behind with being paid, and threatening to sack them. Also cos I don't have a limited company, I can't use Costco etc.

So, when it works it's pretty good, at the moment I'm having a rough time and am thinking of diving in and starting my own limited company now I don't have to deal with moving house etc at the same time.

May post an update once my situation's resolved.

Simon.

Buckrogers

Check out

Shout99

Good site setup after IR35 was introduced.

Good luck!

CC

Simon, Buck, thanks for that .

I hope u work out ure payment hassles Simon. Sounds interesting how u manage to avoid getting stung for tax...

Gave my notice in today so no turning back now

simon_prickett

CC - making progress on the payment issue, but it's showing up a number of shortcomings of the particular umbrella. I'll post a conclusion here, unless someone repossesses my PC for non-payment of bills etc due to having no money in the meantime...

Simon.

DavidLewis

Hi Si...... hey, I owe you some money, will that help

I'd recommend P4

simon_prickett

Dave - YHM, but not for the reasons you might think!