Self Employed advice?

[Violet]

I'm about to commence contract work which will either mean:

Self Employed (working for the company as a sole trader)

or:

Working for an umbrella company (who essentially will receive the money and pay me, and tax/NI is paid).

Can anyone advise me, which is the best route?

[Scary_Fish]

Not sure *helpful* but when was looking for work I was offered similar and the umbrella company thing seemed really suspect - lots and lots of T&Cs and i think they still took a cut.

Seems like self employed simplest and least likely to get shafted - declare tax and pay NI when time comes?

[Scary_Fish]

Old thread but useful info -

Self Employed or Umbrella Company ??? - Freelance UK Forums - Forum for UK Freelancers

[Scary_Fish]

Oh - I work for a tax firm - will ask someone

[jamied]

im SE and one stage worked for an umbrella company, the later i hated as to much red tape and its not a true employment (you might aswell work for an agency)
Being SE i have contracted myself to 4 other companies which i invoice on a weekly or monthly basis then end of year i sort my tax and other stuff out, nice and flexable but if yo need to back yourself up for sickness, holidays ect.

[Gary]

I'm a contractor/consultant, currently in the process of setting up my ltd. status.

The first real question this sort of work arrangement throws up is whether you will be 'properly' self-employed - at least in the eyes of the HMRC. Something you will need to become very familiar with is the IR35 legislation, which is basically there to 'catch' contractors benefitting from the advantages of being directors, who are actually, in terms of their working practices, effectively employed - and therefore allow the HMRC to tax them PAYE, instead of Corporation Tax.

There is a TONNE of information out there - simply google 'contractor uk' and your head will be happily spinning like an owl on a turntable within 5 minutes.

- much of it depends on the type of work you are pimping yourself out for - personally I'm in tech/engineering/IT - so already I'm up against it w.r.t making sure I don't get caught by IR35

[Gary]

im SE and one stage worked for an umbrella company, the later i hated as to much red tape and its not a true employment (you might aswell work for an agency)
Being SE i have contracted myself to 4 other companies which i invoice on a weekly or monthly basis then end of year i sort my tax and other stuff out, nice and flexable but if yo need to back yourself up for sickness, holidays ect.

Jamie - working for an umbrella co. is NOT necessarily the same as working for an Agency - I will be SE, under my own ltd. co - but the contract I sign is with an agency, and not the actual end client whom I provide the service to. The agency have a contract with the client AND my company - but this does not alter or dictate how exactly I set up my business arrangements.

[jamied]

just saying gary that sometime going via an agent can be a bit easier..not much easier..lol
the photography company i have now is not ltd (did that with JADE before i sold it) but im contracted to a company which i then are sent to their clients to do work (I.T. and System Based).

[Gary]

just saying gary that sometime going via an agent can be a bit easier..not much easier..lol
the photography company i have now is not ltd (did that with JADE before i sold it) but im contracted to a company which i then are sent to their clients to do work (I.T. and System Based).

totally agree - agencies are typically unavoidable in the IT industry until you make enough of a name for yourself to start going direct, and even then you'll be doing well to do ALL your business without going via an agency. Just wanted to point out that regardless of whether you do this or not, it has no bearing at all on how you choose to set up your own finances - a good agency will be perfectly happy if you go the umbrella route, or as ltd. - they still get their cut regardless. It is unlikely however you'll enjoy the same potential work if you go sole trader however, so personally I'd avoid that particular setup.

Register for VAT as well - the flat rate scheme on it's own can 'earn' you thousands a year if you generally don't buy a lot of stock or equipment.

[Violet]

Thanks for help everyone.
I avoid agencies now, not because I'm 'a name', it's just because I hate them.
I'm avoiding the umbrella thing now, I'm going legit and registering everything beforehand - I'm working in a company, they're providing everything, they pay me wage, but I will have to sort out tax/NI/etc. I'll probably work it out as I go along.

Can anyone tell me the first step I should take to start this. I don't want to sound like an idiot to my 'boss', as I've asked him a few questions so far.

[jamied]

do you have to invoice the company to get your wage?

[Scary_Fish]

Just spoken to our accountancy/legal boffins -

Avoid umbrella like the plague - rip off - selling you something you can do yourself.

Short term - self employed - invoice the company and do self assesment when time comes - taking into account any benfits recieved - earnings from contract work and and payroll.

Longer term - set up Ltd company (£75 ish - we can actually do this if you want any help)

Mentioned HMRC Contractors Scheme - whereby you ring them for a Contractor Number and they deduct tax at source. It seems employeers are not very familiar with this.

If need any clarification let me know as just passing on info - can get more detail.

[Gary]

- the key thing being, get paid on a proper contract & invoicing basis, not anything that looks like a payroll/wage basis.

Make sure your statement of work is worded so that job is a finite & properely defined service/goods arrangement - no wooly clauses. Termination of contract & substitution clauses are another area to tread carefully through.

[Allvaux]

Go self employed. That way when you get bored you can have a wank in the toilets, catch yourself on CCTV and then sack yourself, appeal and get a big payout from a 'No win, no fee' solicitor claiming infringement of personal space.
This will only work if you already have loads of money so you can defend yourself against the claims bought againt you by yourself. If you lose the claim at least be the better man and shake hands with yourself outside the court, and if you win you can run back to the office and crack one off in celebration.

[wayne451]

Go self employed. That way when you get bored you can have a wank in the toilets, catch yourself on CCTV and then sack yourself, appeal and get a big payout from a 'No win, no fee' solicitor claiming infringement of personal space.
This will only work if you already have loads of money so you can defend yourself against the claims bought againt you by yourself. If you lose the claim at least be the better man and shake hands with yourself outside the court, and if you win you can run back to the office and crack one off in celebration.

Drugs are bad.

Drugs and alcohol are worse.

Drugs and alcohol when suffering from alzheimer's and spending your old age pension on class A sniff and White Lightning is really, really bad sh*t.

[Allvaux]

**** White Lightning, I've discovered double Baileys and double brandys now. Mix with a selection of mingebag lager and vodka and it's a winning combination.

[Scary_Fish]

Baileys