Contract work and Limited company

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  • motorguy
    motorguy Posts: 22,452
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    Many companies who employ contractors insist that only certain agents are used. They have a list that you have to choose from as they are "approved" and vetted by the companies, so using a local Accountant is often not an option. The figure above is actually quite low for such companies.

    I think you're a little confused.

    Companies usually engage you via an agency. You may then chose to engage with the agency via a LTD Co or an Umbrella.

    If you have a LTD Co, you will usually have an accountant to do your company accounts.

    A company wont engage with your accountant.
  • motorguy
    motorguy Posts: 22,452
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    edited 19 October 2017 at 9:52PM
    antrobus wrote: »
    A quick look at their website reveals that they charge 105 pounds per month plus VAT. What the ....

    1260 quid a year for ltd co for a contractor! Go find a local accountant and halve that price.

    I'm paying around that for my accountancy fees for my LTD Co.

    Self employed accounts could be around half that, but £100ish a month doesnt sound far away.

    EDIT: Just checked and it seems £100ish a month is about right

    http://forums.contractoruk.com/accounting-legal/117189-accounting-fees-too-much.html
  • motorguy wrote: »
    I think you're a little confused.

    Companies usually engage you via an agency. You may then chose to engage with the agency via a LTD Co or an Umbrella.

    If you have a LTD Co, you will usually have an accountant to do your company accounts.

    A company wont engage with your accountant.

    No, my OH recently became a contractor for a big name company, they only accept contractors via another big name recruitment type company and only allow those contractors to use an accountancy firm from their approved list, all of whom charge in that region for their services.
  • Pennywise
    Pennywise Posts: 13,468
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    antrobus wrote: »
    Good point.

    I bet you'd be happy with 1,260 a year.:)

    The reason I'm not keen on short term contractors is that they're a PITA to set up and close down, train them in what's allowable, what's not, set up payroll and then close down, set up VAT and then close down. Even for £1,260 for a full year (which I wouldn't charge if it was only trading for 3 months), it's just not worth it for the time I'd spend. I can earn more than that doing quality/worthwhile work for long term clients.
  • Pennywise
    Pennywise Posts: 13,468
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    No, my OH recently became a contractor for a big name company, they only accept contractors via another big name recruitment type company and only allow those contractors to use an accountancy firm from their approved list, all of whom charge in that region for their services.

    But that will be for umbrella/managed service companies. Not for those who own and operate their own limited company.

    If you contract via your own limited company, your "big name company" employer/client won't have any contact with your accountant and has no say in who you use - they won't even know who your accountant is. You'll invoice them via your limited company and they'll pay into your limited company bank account. Your accountant isn't in the loop at all and is completely irrelevant to your employer/client.
  • Pennywise wrote: »
    But that will be for umbrella/managed service companies. Not for those who own and operate their own limited company.

    If you contract via your own limited company, your "big name company" employer/client won't have any contact with your accountant and has no say in who you use - they won't even know who your accountant is. You'll invoice them via your limited company and they'll pay into your limited company bank account. Your accountant isn't in the loop at all and is completely irrelevant to your employer/client.

    This for a Ltd company, he could have gone either route (umbrella/Ltd) but the rules of engagement were the same.
  • Aquamania
    Aquamania Posts: 2,112 Forumite
    This for a Ltd company, he could have gone either route (umbrella/Ltd) but the rules of engagement were the same.

    Who is this "big name company" and how will they control which accountant, if any, another limited company may elect to use? :huh:
  • Aquamania wrote: »
    Who is this "big name company" and how will they control which accountant, if any, another limited company may elect to use? :huh:

    I don't really want to disclose that, but they wouldn't progress the contactor application until a choice had been made from their approved list.
  • motorguy
    motorguy Posts: 22,452
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    No, my OH recently became a contractor for a big name company, they only accept contractors via another big name recruitment type company and only allow those contractors to use an accountancy firm from their approved list, all of whom charge in that region for their services.

    And you're still confused.

    No-one is saying the company would engage with the O/P via their accountants.

    The amount quoted is for accountancy fees, not as an agency fee.
  • motorguy
    motorguy Posts: 22,452
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    edited 22 October 2017 at 8:37AM
    I don't really want to disclose that, but they wouldn't progress the contactor application until a choice had been made from their approved list.

    You really need to get it clear in your head whats happening here.

    Your husband is engaging with the "big name" company through an agency. That agency is taking a fee - possibly monthly, probably off his day rate by billing the "big name" company a bit more than they're giving your husband.

    Neither the "big name" company nor the agency will engage with your husband unless its through his own LTD Co, or as an employee of an Umbrella company. There are various reasons for that. Some of them financial (they dont want to pay Employers NI) and some of them contractual (they dont want your husband accruing rights).

    Your husband will then pay an accountant - either on a year basis (as i do mine) OR on a monthly basis as per what the O/P is describing.

    You've got agency and accountant confused.

    Not one !!!! will the "big name" company give about who your husbands accountant is.
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