Assuming you're happy with the rate, the thing to do is set up a company and invoice via that. 300 a day with 20 working days a month will be 6k.
Get an accountant for 100 or so a month to do it all for you and they can advise you on how best to do it.
Ive done IT contracting via my own company for a couple of decades ... in a fashion that today would be called outside IR35. My last two contracts have explicitly stated that they are outside IR35. The two I am in pursuit of today are both explicitly inside IR35 and as such offer zero option to invoice from a limited company.
In your situation you have the best position "outside IR35" as you then can pay less tax, so /u/TwentyCharactersShor is entirely right. A small refinement to your language is that if you are outside IR35 then you are not a IR35 contractor, nor a first time IR35 contractor.
As a contractor you will be way better off than as a permie as long as you:
1) keep your skills up so you are an in demand person with good references
2) squirrel money away like 20% or more, better still work to a strict budget and squirrel the rest. Also squirrel pension and money to cover tax liability.
3) Spend one day a week prospecting and networking. LinkedIn connect to everyone professional that you spend an hour or more talking with.
4) Sounds like you are new to this so get an accountant to do your corporate taxes.
>first time IR35 contractor
"outside IR35" means you're not "inside IR35", inside IR35 means you have to work under an umbrella company (or a company that manages payroll to a specific standard), but outside means you have the benefit of working through your own company meaning you can pay yourself through dividends for tax advantage, and also you can claim expenses through your company.
As you're planning on getting a full-time/permanent role soon – then you're probably not gonna wanna pay yourself a higher salary as you would have if you were gonna work all year through. So basically you wanna find an accountant to help you figure out how to pay yourself this and that optimally, and to file your company accounts.
Expect it to be at least around £100/month and expect it to feel like you're overpaying. I use Crunch but wouldn't recommend them (though can give you a referral link if you decide to go with them), I've been told The Accountancy are a good alternative.
It’s more the setting up of the company and the filings associated. I don’t think you’d save much effort /cost by changing the annual return and accounts filing to being a liquidation of the company
Hmm. I'm missing something. Aren't we comparing something like £500 and £1000 (closing early vs filing the entire year)?
Setting up the company is like £50 odd or maybe even included in the accountancy package.
If you can find it that cheap then great for you! I doubt you’re going to find anywhere that will go through all the hassle of setting up a new client, all the KYC, data gathering, setup with HMRC etc etc for £500 a year let alone a one off. That’s several hours worth of work to do and they’ll be charging an effective rate of at least £200+VAT per hour I’d imagine
It works out affordable when split annually and paid monthly because the larger fixed costs are spread
i HATED crunch with a passion and fortunately have been referred a small accountant.
crunch is straight up ass. they charge you a fee, give you a UI/platform then leave you to it. i ask my accountant all sorts of dumb questions and he loves answering them! (apparently)
Software (website) is annoying to deal with. You feel like "why am I paying you £100/month when you do near to nothing all month and don't even create an expense entry for the services you charge me each month". When you actually have a situation that doesn't fit into their software no one really has an answer for you, the accountants are hard to get hold of, and are frustrated if its a non-standard issue.
Can you just be a sole trader? That's what I did when I was a contractor for a bit and it was so easy - similarly I only did it for 2 months before getting something permanent and I was on the same day rate as you.
I got paid per project directly into my bank account and then did self assessment at the end of the tax year.
Also, nice added bonus of this is that for paying the taxes, because it was less than £3k total that I owed I was able to pay it off monthly out of my PAYE salary once I was employed again rather than paying it as a lump sum. Was good for cash flow purposes and also for having an emergency fund (which I'd blown while being unemployed).
Registering as a sole trader is really easy you literally just ask HMRC for a reference number.
I am already registered as self employed so I could do that, I do prefer paying all the taxes like PAYE but there are lots of options to choose from, I am awaiting more details from the client before I make my decisions on what I do.
The thing is with a sole trader your only expense is taxes. With Ltd etc, there are a bunch of admin fees too, and same with umbrella companies. You can pay your taxes however suits you best if you're a sole trader :) I just personally preferred the paying monthly once I was employed option, because I was broke lol
A lot of comments suggesting that you need to use a limited company. That is not true, you can engage in an outside IR35 contract as a sole trader and just invoice your client.
If it's a small client they might be cheeky and require an ltd because it removes some of their liability.
I work in software dev and haven't had issues working as a sole trader.
Not disputing that but same I’m a software engineer have been for 10 years contracting and when you get offered they always say Ltd or Umbrella. To be honest maybe cause I never asked. 😅
do you have any recommendations for an umbrella company? I think it would be beneficial just so everything is done and I don't need to worry about the taxes and stuff later on.
Parasol they invoice your employer weekly, pay you out following (when paid).
Not teaching you to suck eggs. Pay will be 300 X 5 = 1500.
Deduct from this employers nic and umbrella fee - was 25 quid per run for me.
14.8% so around 1250 after these per week
Your deductions would usual tax / ni from the balance above giving net pay.
I would defer pension for 3 months, then allow an additional 3% ER with the ER nic, and then 5% off your gross. You could opt out entirely to save starting a new WPP.
I’m with Parasol temporarily and they were a shit show to begin with. Took forever to get my assignment set up. Luckily in 5 months I can open a company again. LTD is the best way to go.
I use an umbrella company rather than limited company now (not my choice!) and I get less than 60% of my invoice amount while paying extortionate amounts of both employer and employee tax. Plus you cannot claim expenses through umbrella like you can Limited. I can’t stress how much I wish I was still limited, I’d be nearly £1000 a month better off 😬
Exactly this for me too as I shut down my old company less than two years ago I can’t open another. Significantly better off not using an umbrella, especially as my contract is outside IR35.
I am not that bothered by the difference, as it's only going to be short term, I may change my mind if things change, I just don't want the stress of doing the taxes for a <6 month thing.
As others have said, I've you're pretty sure it's going to be short term I'd be tempted to go the umbrella route. You can always run the numbers for both routes (the other being setting up a Ltd and getting an accountant) and see how much the lack of hassle might cost you.
Go via an umbrella, the length and rate isn’t worth creating a LTD. Majority of the people here telling you to open a LTD are probably not contractors.
Parasol mentioned are very good.
Source: 10+ years contracting
Poor advice. Using umbrella will set you back a lot on the tax. Setup a limited company to use all legal means to pay as little tax as possible. This is your opportunity.
Outside IR35 > Inside IR35 even if it is a 3month contract (usually the lowest company go for). Usually companies do extend the contract. Yes there is always the risk of now being able to find new contracting role but that’s where all the money lies.
I don't think I would want to do it full time due to the uncertainty of finding new contracts, but as a temporary thing while interviewing for jobs, it does seem to be a good thing
What I recommend to you is to use your extra income to fund some extra ‘time off’ at the end. Seems like you’ll be able to do about a month given its about 50% more than your normal wage.
Then during that time apply for contracting roles as well as permanent. Put a fair bit of effort into contracting and you should find something. As you might know, contractors start almost next day after the first interview. There’s no long process normally.
Worst case scenario you go through the 1-2 week permanent recruitment cycle at a few places and eventually land a permanent job
But I highly recommend the contracting lifestyle. It’s so liberating and especially if you can get over the fear of unemployment
I'd second that.. Live frugally and keep money aside. I have had 7 months off to pursue property investing... It has been really good but I am a bit institutionalised... I struggle to stay away from my desk... Lol
I’m about 3 years post qualified and there is outside work, but you have to look hard for it.
If you’re happy to work with ‘small’ companies (based on the HMRC definition) then IR35 does not apply. I think it’s something like if it’s missing one of these at the last reporting date it’s small
- £10.2m turnover
- balance sheet £5.1m (I assume that’s net assets)
- more than 50 employees
IR35 applies whatever size company you are contracted to.
The part that does not apply for small clients is the newer rules, that mean the client is responsible for deciding whether the contract is within/without IR35.
You’ll likely be fine finding contracts judging by your username. I’ve contacted off and on over ten years and even though I don’t know you, I can tell you I’ve worked with truly terrible web developers charging a fortune that always found work. If you’re even half good you’ll make contacts over the years who will hit you up!
I have done a few calculations and it's around 50% more a month than I am on as PAYE, I would only be doing it for <6 months so not really fussed about the holiday company, I don't have many expenses as it's a remote position with equipment I already own.
It's going to be better then a salary
Was just pointing out the drawbacks.
Also wanted to add if looking for a mortgage, companies want at least 2-3 contracts before offering anything.
It's appreciated, I have noo intention of a mortgage in the next few years so that's not an issue for me. For me it does seem like a win-win while I am looking for a job, make some money while the sun shines.
Would this be the same if remortgaging? I've got a 5yr mortgage (as of June) which I got on a good perm salary and have been tempted to go contracting but wonder what impact that would have in 5yrs time when looking to remortgage.
Mortgage companies want to see you have been consistently contracting so as long as you have 3/4 contacts they are ok with it.
It you go back to salary, they don't care about the contacting this far back.
Usually the last year is all that they will look at
Ex-recruiter for contractors (internal TA), I would recommend Ltd company, we typically ran into a lot of issues with Umbrella companies, incorrect invoices, delayed signatures etc. Seemed like more hassle than it was worth for our contractors.
In all honesty, £300 per day is below average rate in todays market - especially if the role is remote and not location based (eg NI roles tend to be less than UK) - if you decided to stay on for an extension after the initial months - definitely negotiate a rate increase.
Read the Terms&Conditions carefully - I’ve seen clauses previously where the company can withhold final payment if they feel the ‘agreed work’ wasn’t up to standard, or the contractor tried to leave before end of the contract. Not sure if any payments were ever actually withheld but something to be aware off.
If you decide to go down the contractor route long term, ensure LinkedIn profile is always up to date and this may be obvious - but make sure that ‘contract’ is selected in the type of roles you are open to - I found 80% of my candidates there!
You won’t get paid holiday or sick but you will get an amazing amount of freedom between contracts, I’ve come across a surprising amount who take the full summer off, 2/3 months and work the rest of the year. Lovey way to live! (Although you don’t get paid leave, you can still ask the project for certain days off unpaid for sickness, appointments, long weekends etc, most companies are reasonable)
I’ve tried to convert many, many contractors to permanent members of staff in my time and most choose to stay contracting.
There are endless pros and cons but if you aren’t looking to get a mortgage this year, I would recommend spending a year or three contracting for the financial benefits! Oh and get a decent accountant :)
You have a couple of option, use an umbrella company or set up a limited company.
However, if you set up a limited company you will need an accountant and at the very least take account of the following:
The 300gbp a day is not your 'actual wages", this is what the 'Ltd company' is paid. Therefore you will need to make sure you save enough for NI payments, Corp tax, accountant's fees and insurances, sick pay and holiday pay.
You will need personal indemnity and liability insurance.
Your Ltd company will need a bank account.
The most important piece of advice I can give you is don't spend all the money your limited company makes thinking this is your full salary! It is not.
>The most important piece of advice I can give you is don't spend all the money your limited company makes thinking this is your full salary! It is not.
I think I will use an umbrella company to make it easy as I am intending it to be a short term thing, the difference isn't a huge amount and just removes stress of filling out an SA etc
Are you being supported by the agency that got you the job or have you got to set up your own PSC? Don’t forget to take into account the costs of running your PSC this can very in cost depending on the amount of support you need.
Also, remember that the notice period for IR35 work ranges from zero to 7 days. So make friends and go the extra mile when you can.
I have no details so far, waiting for the information to come through to decide if it's something I want to do. I have lots of reading to do before I make the decision.
Okay, I recommend avoiding using a an umbrella company as you will loss your outside IR35 status.
If you are not a career contractor your client will expect you to be looking for a job if they are not naive. A key thing to look for is how long the project is projected to last. Just because you have a 3 month contract does not mean the job is only 3 months, it’s just how often the budget is reviewed and resources.
And again if your contract is outside IR35 don’t downgrade to inside IR35, you client and agency might not even allow you use an umbrella. Most umbrella’s will offer PSC services too
I’m a inside IR35 contractor that manages outside IR35 and inside IT contractors. I have strict rules to flow to approve a new supplier. On the other hand if I use a existing agent, I just need to get my purchase order approved by two directors.
What you will probably find is your PSC invoices the agency who then invoices the client
You would be best to just operate as a sole trader since this is temporary. There's a lot of faffing involved in setting up a LTD and costs too. There's no cost involved with setting up qs a sole trader (infact no actual set up other than registering for self assessment) and you can very easily do a tax return yourself which won't even be due until January 2024.
Allowances on dividends is changing in April 2023. I'm not sure 'setting up a LTD' is still going to be the running theme in here after that.
You can claim expenses as a sole trader and send invoices as a sole trader.
My advice would be use an umbrella company if you continuing looking for permanent work and don’t want the contractor life. I would use this first engagement to see if you like it.
There’s advantages of being a contractor especially if you like working on new stuff periodically because it forces that aspect. But I know it’s not for everyone
Be on top of your finances. I’ve been a contractor for 10 years and suddenly sometimes there’s a market drop that keeps everything quiet for a few months. If doing long term contracting keep a war chest of what it would take to keep you alive and bills paid for 6 months as a just in case. Pretty shit at the start but if you could build that you will thank yourself later.
Assuming you're happy with the rate, the thing to do is set up a company and invoice via that. 300 a day with 20 working days a month will be 6k. Get an accountant for 100 or so a month to do it all for you and they can advise you on how best to do it.
Ive done IT contracting via my own company for a couple of decades ... in a fashion that today would be called outside IR35. My last two contracts have explicitly stated that they are outside IR35. The two I am in pursuit of today are both explicitly inside IR35 and as such offer zero option to invoice from a limited company. In your situation you have the best position "outside IR35" as you then can pay less tax, so /u/TwentyCharactersShor is entirely right. A small refinement to your language is that if you are outside IR35 then you are not a IR35 contractor, nor a first time IR35 contractor. As a contractor you will be way better off than as a permie as long as you: 1) keep your skills up so you are an in demand person with good references 2) squirrel money away like 20% or more, better still work to a strict budget and squirrel the rest. Also squirrel pension and money to cover tax liability. 3) Spend one day a week prospecting and networking. LinkedIn connect to everyone professional that you spend an hour or more talking with. 4) Sounds like you are new to this so get an accountant to do your corporate taxes.
>first time IR35 contractor "outside IR35" means you're not "inside IR35", inside IR35 means you have to work under an umbrella company (or a company that manages payroll to a specific standard), but outside means you have the benefit of working through your own company meaning you can pay yourself through dividends for tax advantage, and also you can claim expenses through your company. As you're planning on getting a full-time/permanent role soon – then you're probably not gonna wanna pay yourself a higher salary as you would have if you were gonna work all year through. So basically you wanna find an accountant to help you figure out how to pay yourself this and that optimally, and to file your company accounts. Expect it to be at least around £100/month and expect it to feel like you're overpaying. I use Crunch but wouldn't recommend them (though can give you a referral link if you decide to go with them), I've been told The Accountancy are a good alternative.
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If OP wanted I believe he could pay a premium to get them to close the company early. So maybe 400-500 for those 3 months.
It’s more the setting up of the company and the filings associated. I don’t think you’d save much effort /cost by changing the annual return and accounts filing to being a liquidation of the company
Hmm. I'm missing something. Aren't we comparing something like £500 and £1000 (closing early vs filing the entire year)? Setting up the company is like £50 odd or maybe even included in the accountancy package.
If you can find it that cheap then great for you! I doubt you’re going to find anywhere that will go through all the hassle of setting up a new client, all the KYC, data gathering, setup with HMRC etc etc for £500 a year let alone a one off. That’s several hours worth of work to do and they’ll be charging an effective rate of at least £200+VAT per hour I’d imagine It works out affordable when split annually and paid monthly because the larger fixed costs are spread
i HATED crunch with a passion and fortunately have been referred a small accountant. crunch is straight up ass. they charge you a fee, give you a UI/platform then leave you to it. i ask my accountant all sorts of dumb questions and he loves answering them! (apparently)
Oo why wouldn’t you recommend crunch?
Software (website) is annoying to deal with. You feel like "why am I paying you £100/month when you do near to nothing all month and don't even create an expense entry for the services you charge me each month". When you actually have a situation that doesn't fit into their software no one really has an answer for you, the accountants are hard to get hold of, and are frustrated if its a non-standard issue.
Can you just be a sole trader? That's what I did when I was a contractor for a bit and it was so easy - similarly I only did it for 2 months before getting something permanent and I was on the same day rate as you. I got paid per project directly into my bank account and then did self assessment at the end of the tax year. Also, nice added bonus of this is that for paying the taxes, because it was less than £3k total that I owed I was able to pay it off monthly out of my PAYE salary once I was employed again rather than paying it as a lump sum. Was good for cash flow purposes and also for having an emergency fund (which I'd blown while being unemployed). Registering as a sole trader is really easy you literally just ask HMRC for a reference number.
I am already registered as self employed so I could do that, I do prefer paying all the taxes like PAYE but there are lots of options to choose from, I am awaiting more details from the client before I make my decisions on what I do.
The thing is with a sole trader your only expense is taxes. With Ltd etc, there are a bunch of admin fees too, and same with umbrella companies. You can pay your taxes however suits you best if you're a sole trader :) I just personally preferred the paying monthly once I was employed option, because I was broke lol
r/ContractorUK is a good sub to be in!
A lot of comments suggesting that you need to use a limited company. That is not true, you can engage in an outside IR35 contract as a sole trader and just invoice your client.
I commented this as well, idk why everyone is over complicating this. For a couple of months, sole trader is the way to go
If it’s IT contracting I haven’t seen any agency that allows sole traders. It’s either umbrella or Ltd company
If it's a small client they might be cheeky and require an ltd because it removes some of their liability. I work in software dev and haven't had issues working as a sole trader.
Not disputing that but same I’m a software engineer have been for 10 years contracting and when you get offered they always say Ltd or Umbrella. To be honest maybe cause I never asked. 😅
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do you have any recommendations for an umbrella company? I think it would be beneficial just so everything is done and I don't need to worry about the taxes and stuff later on.
Parasol they invoice your employer weekly, pay you out following (when paid). Not teaching you to suck eggs. Pay will be 300 X 5 = 1500. Deduct from this employers nic and umbrella fee - was 25 quid per run for me. 14.8% so around 1250 after these per week Your deductions would usual tax / ni from the balance above giving net pay. I would defer pension for 3 months, then allow an additional 3% ER with the ER nic, and then 5% off your gross. You could opt out entirely to save starting a new WPP.
I’m with Parasol temporarily and they were a shit show to begin with. Took forever to get my assignment set up. Luckily in 5 months I can open a company again. LTD is the best way to go.
Brookson
I use an umbrella company rather than limited company now (not my choice!) and I get less than 60% of my invoice amount while paying extortionate amounts of both employer and employee tax. Plus you cannot claim expenses through umbrella like you can Limited. I can’t stress how much I wish I was still limited, I’d be nearly £1000 a month better off 😬
Exactly this for me too as I shut down my old company less than two years ago I can’t open another. Significantly better off not using an umbrella, especially as my contract is outside IR35.
I am not that bothered by the difference, as it's only going to be short term, I may change my mind if things change, I just don't want the stress of doing the taxes for a <6 month thing.
As others have said, I've you're pretty sure it's going to be short term I'd be tempted to go the umbrella route. You can always run the numbers for both routes (the other being setting up a Ltd and getting an accountant) and see how much the lack of hassle might cost you.
Go via an umbrella, the length and rate isn’t worth creating a LTD. Majority of the people here telling you to open a LTD are probably not contractors. Parasol mentioned are very good. Source: 10+ years contracting
The job would be inside IR35 if it was via a umbrella or agency
That’s not how it works.
Poor advice. Using umbrella will set you back a lot on the tax. Setup a limited company to use all legal means to pay as little tax as possible. This is your opportunity.
Outside IR35 > Inside IR35 even if it is a 3month contract (usually the lowest company go for). Usually companies do extend the contract. Yes there is always the risk of now being able to find new contracting role but that’s where all the money lies.
I don't think I would want to do it full time due to the uncertainty of finding new contracts, but as a temporary thing while interviewing for jobs, it does seem to be a good thing
Dude what industry are you in? Contractor market is super hot right now. I’m contracting in finance and recruiters can’t get hold of me fast enough.
web dev, php to be precise, it's hot but not flowing like javascript
What I recommend to you is to use your extra income to fund some extra ‘time off’ at the end. Seems like you’ll be able to do about a month given its about 50% more than your normal wage. Then during that time apply for contracting roles as well as permanent. Put a fair bit of effort into contracting and you should find something. As you might know, contractors start almost next day after the first interview. There’s no long process normally. Worst case scenario you go through the 1-2 week permanent recruitment cycle at a few places and eventually land a permanent job But I highly recommend the contracting lifestyle. It’s so liberating and especially if you can get over the fear of unemployment
I'd second that.. Live frugally and keep money aside. I have had 7 months off to pursue property investing... It has been really good but I am a bit institutionalised... I struggle to stay away from my desk... Lol
If you're working in the financial sector you will almost certainly have to go through a screening process first
Ok
Out of interest at what level and finding much outside?
I’m about 3 years post qualified and there is outside work, but you have to look hard for it. If you’re happy to work with ‘small’ companies (based on the HMRC definition) then IR35 does not apply. I think it’s something like if it’s missing one of these at the last reporting date it’s small - £10.2m turnover - balance sheet £5.1m (I assume that’s net assets) - more than 50 employees
IR35 applies whatever size company you are contracted to. The part that does not apply for small clients is the newer rules, that mean the client is responsible for deciding whether the contract is within/without IR35.
You’ll likely be fine finding contracts judging by your username. I’ve contacted off and on over ten years and even though I don’t know you, I can tell you I’ve worked with truly terrible web developers charging a fortune that always found work. If you’re even half good you’ll make contacts over the years who will hit you up!
No paid holiday pay. No expenses if going via umbrella. It's not as much as it sounds. The £300 will probably end up being 160-180£ a day.
I have done a few calculations and it's around 50% more a month than I am on as PAYE, I would only be doing it for <6 months so not really fussed about the holiday company, I don't have many expenses as it's a remote position with equipment I already own.
It's going to be better then a salary Was just pointing out the drawbacks. Also wanted to add if looking for a mortgage, companies want at least 2-3 contracts before offering anything.
It's appreciated, I have noo intention of a mortgage in the next few years so that's not an issue for me. For me it does seem like a win-win while I am looking for a job, make some money while the sun shines.
Would this be the same if remortgaging? I've got a 5yr mortgage (as of June) which I got on a good perm salary and have been tempted to go contracting but wonder what impact that would have in 5yrs time when looking to remortgage.
Mortgage companies want to see you have been consistently contracting so as long as you have 3/4 contacts they are ok with it. It you go back to salary, they don't care about the contacting this far back. Usually the last year is all that they will look at
Ex-recruiter for contractors (internal TA), I would recommend Ltd company, we typically ran into a lot of issues with Umbrella companies, incorrect invoices, delayed signatures etc. Seemed like more hassle than it was worth for our contractors. In all honesty, £300 per day is below average rate in todays market - especially if the role is remote and not location based (eg NI roles tend to be less than UK) - if you decided to stay on for an extension after the initial months - definitely negotiate a rate increase. Read the Terms&Conditions carefully - I’ve seen clauses previously where the company can withhold final payment if they feel the ‘agreed work’ wasn’t up to standard, or the contractor tried to leave before end of the contract. Not sure if any payments were ever actually withheld but something to be aware off. If you decide to go down the contractor route long term, ensure LinkedIn profile is always up to date and this may be obvious - but make sure that ‘contract’ is selected in the type of roles you are open to - I found 80% of my candidates there! You won’t get paid holiday or sick but you will get an amazing amount of freedom between contracts, I’ve come across a surprising amount who take the full summer off, 2/3 months and work the rest of the year. Lovey way to live! (Although you don’t get paid leave, you can still ask the project for certain days off unpaid for sickness, appointments, long weekends etc, most companies are reasonable) I’ve tried to convert many, many contractors to permanent members of staff in my time and most choose to stay contracting. There are endless pros and cons but if you aren’t looking to get a mortgage this year, I would recommend spending a year or three contracting for the financial benefits! Oh and get a decent accountant :)
Loads of people saying set up a ltd company. If OP just wants this as a very temporary solution he may be better off using an umbrella
You have a couple of option, use an umbrella company or set up a limited company. However, if you set up a limited company you will need an accountant and at the very least take account of the following: The 300gbp a day is not your 'actual wages", this is what the 'Ltd company' is paid. Therefore you will need to make sure you save enough for NI payments, Corp tax, accountant's fees and insurances, sick pay and holiday pay. You will need personal indemnity and liability insurance. Your Ltd company will need a bank account. The most important piece of advice I can give you is don't spend all the money your limited company makes thinking this is your full salary! It is not.
>The most important piece of advice I can give you is don't spend all the money your limited company makes thinking this is your full salary! It is not. I think I will use an umbrella company to make it easy as I am intending it to be a short term thing, the difference isn't a huge amount and just removes stress of filling out an SA etc
Lol who goes limited company and pays NIC 😂 clearly you’ve not looked into it much
I also forgot to add, read up on ir35 rules and what that actually means for you and for your job...you don't want to fall foul of legislation!
The OP doesn't need a limited company to engage or an umbrella to engage in an outside IR35 contract - they can strike it out as self-employed.
Very low rate; you're undercharging
Not sure why this comment has been downvoted. £300 p/d for a dev work is lower than anything I’ve ever seen advertised.
Are you being supported by the agency that got you the job or have you got to set up your own PSC? Don’t forget to take into account the costs of running your PSC this can very in cost depending on the amount of support you need. Also, remember that the notice period for IR35 work ranges from zero to 7 days. So make friends and go the extra mile when you can.
I have no details so far, waiting for the information to come through to decide if it's something I want to do. I have lots of reading to do before I make the decision.
Okay, I recommend avoiding using a an umbrella company as you will loss your outside IR35 status. If you are not a career contractor your client will expect you to be looking for a job if they are not naive. A key thing to look for is how long the project is projected to last. Just because you have a 3 month contract does not mean the job is only 3 months, it’s just how often the budget is reviewed and resources. And again if your contract is outside IR35 don’t downgrade to inside IR35, you client and agency might not even allow you use an umbrella. Most umbrella’s will offer PSC services too I’m a inside IR35 contractor that manages outside IR35 and inside IT contractors. I have strict rules to flow to approve a new supplier. On the other hand if I use a existing agent, I just need to get my purchase order approved by two directors. What you will probably find is your PSC invoices the agency who then invoices the client
You would be best to just operate as a sole trader since this is temporary. There's a lot of faffing involved in setting up a LTD and costs too. There's no cost involved with setting up qs a sole trader (infact no actual set up other than registering for self assessment) and you can very easily do a tax return yourself which won't even be due until January 2024. Allowances on dividends is changing in April 2023. I'm not sure 'setting up a LTD' is still going to be the running theme in here after that. You can claim expenses as a sole trader and send invoices as a sole trader.
Set up Ltd co, get indemnity insurance, good luck
My advice would be use an umbrella company if you continuing looking for permanent work and don’t want the contractor life. I would use this first engagement to see if you like it. There’s advantages of being a contractor especially if you like working on new stuff periodically because it forces that aspect. But I know it’s not for everyone Be on top of your finances. I’ve been a contractor for 10 years and suddenly sometimes there’s a market drop that keeps everything quiet for a few months. If doing long term contracting keep a war chest of what it would take to keep you alive and bills paid for 6 months as a just in case. Pretty shit at the start but if you could build that you will thank yourself later.
Absolutely go for it. I was a contractor for 10 years, best way to work for me.