Becmoing self employed contractor

Peter999_2

Hi,

I finished working for a company a couple of months, and was employed as a full time worker. I left as it was just too many hours/long travelling times.

The company have contacted me and asked me to do some programming for them (it is the heating controls industry) and I want to do this but have my own company and therefore contract for them.

They want me to start next week and are willing to pay £45 an hour. Do I need to setup a limited company with Companies House, and will I need liability insurance etc.(it is very unlikely I would go on-site, just do the programming).

Thanks

Peter

Horace

If you are going to work soley for this company then the HMRC will class you as being an employee of that company.

If you are free to work as a sub-contractor for other businesses as well then you need to register as self employed with the HMRC so that you can pay your own tax and NI. You will also need public liability insurance and possibly professional indemnity too.

You don't have to set up as a Limited Company, you can be a sole trader, with a Limited Company you have the addition of paying Corporation Tax and as you would be an employee of the company then you would have to pay tax and NI via PAYE, your company would still need to have insurances. The company will also have to submit accounts to Companies House as well.

Peter999_2

Thanks for the reply.

I would be able to do work for other companies as well, so I suppose self employed might be the way to go.

It looks like I'm going to be able to fix people's PC's, already got a few people asking for my services, also I own a flat that is rented out. Does this make it more sensible to setup a limited company?, I wouldn't be dependent on the money (my wife will be working full time and I have property rented out).

scheming_gypsy

you have the option of going self employed or working through an umbrella company; when you work through an umbrella company you supply time sheets to them, they invoice the company / client and then pay you as a PAYE employee.. You'll still get the tax breaks where you can put in mileage and lunch receipts as though you're a limited company. So you'd get £45 an hour x 37.5 = £1687.50 a week, minus your umbrella fees (£25 / whatever), minus your employers NI. Then from that they'll deduct any expenses (45p a mile and your £5 or £10 a day lunch... parking tickets etc), and then they'll do your tax and NI deductions before adding your expenses back on and paying you.


that's the rough shortened version before somebody comes on with the blah blah blah!