Sole Trader, LTD or umbrella company. Help!

925dancer

scheming_gypsy wrote: »

Looking at their first (and only post in here) it's only the thread title that mentions sole trader. Everything else is umbrella or self employed so i thought that was a bit of a red herring or a misunderstanding on what's wanted of them.

But with it just being for 6 months i think the umbrella company would be the best way to go about it. For Ltd company it's setting up a company, doing your own invoices, paying wages and having an accountant do your tax etc, before folding the company. If they leave the company running when they go PAYE they'll probably get a BR tax code in April as their company is their main source of income.

You're right, sort of! I'm being taken on as a self-employed contractor. I have met everyone in the office, including the company director and have done some digging and apart from this anomaly with new staff, they appear legitimate and above board. They obviously have their reasons for doing things this way, company restructure being the line fed to us new starts but whatever their reasons, I'd rather have a reasonable wage for a few months and be working than continue to claim JSA for however long, 5 months has been quite long enough for me!

I was just getting my knickers all in a twist trying to figure out the best way to go about sorting out my tax and NI liability whilst contracting and I think now that I have had time to read some more and digest, I will go with an umbrella company. I will reassess in a few months when I know the company better and whether they really will be making us PAYE.

If it all goes t*ts up in a month I'll be sure to come back and let those with doubts have a gloat about being right...............

Oh and because it's paid over 44 weeks (allowing for 8 weeks potential sickness and holidays) then the salary does work out commensurate with industry standard for someone with my level of experience.

Savvy_Sue

925dancer wrote: »

If it all goes t*ts up in a month I'll be sure to come back and let those with doubts have a gloat about being right...............

I'm sure we wouldn't want to gloat ... but at least you've had warnings about what to look out for.

paddyrg

I still don't get it - 6 months + 8 weeks still isn't 44 weeks. I get very cautious around hand-wavey numbers, and paying you a lower rate over more weeks than the job lasts still sounds quite alarming, and potentially cause trouble with HMRC. Anyway, do whatever you do, but be defensive in your spending until you have this permie contract! It may all be innocent and well-intentioned, but the implementation looks quite unusual.

Just so you know, contract-to-permie is usually paid at about double the FTE (full-time-employee) rate for the contract bit, and is usually paid monthly in arrears. If the contract is 6 months, you would get the full fee in those 6 months, not at a reduced rate after you stop working or anything like that. In that case it is worth going ltd, but for a short-term fix go umbrella. Also be aware many contracts insist you provide your own equipment and software licenses as you are a contracting company, not an employee, which can cause them trouble if you try claiming employee benefitss as a contractor, and the law sees you as a 'de facto employee'.

Employment law is complex, this sounds like a homebrew solution which may have legal ramifications if things go wrong. The good news for you is that those ramifications are typically to your benefit, but it all sounds too wooly and muddy to be clear.