IT contractor as Sole Trader?

Hillfly

I currently am PAYE under an umbrella company but I want to switch to Sole Trader. I will continue to be PAYE and pay my share of tax but I want to do it so that I can get an offset mortgage linked to my business account. I figure the VAT and long lead time before paying tax bills will substantially offset my mortgage.

My mortgage is about £214K
My gross income is about £85k before VAT.

Anyone else doing this or have any thoughts suggestions on my plan?
I am a little unsure about how to go about all this and was thinking of starting at the beginning of the new tax year.
Perhaps someone could suggest a good accountant -preferably in the home counties area (I'm in Kent).

Thanks.

WHA

Roll back a bit first. Go back to your client/agency and ask if they are willing to engage you as a sole trader. The answer will probably be no. There was a change in the law a few years back which made the agencies take their contractors on either as PAYE and pay wages, or via a limited company - it actually prohibited workers being self employed as sole traders. So, if you're working through an agency, your choice is PAYE or limited company. If you are working directly for the client, there is more chance, but even then, most firms will only take on "self employed" workers through their own limited companies as they face the risk of having to pay tax and NIC if HMRC decide that the terms of the engagement are those of "employer and employee" rather than "self employed". Once you have confirmed that your client will accept paying you as a sole trader, you can then move forward to think of the technicalities and procedures - otherwise you are wasting your time.

Hugh_Jampton_2

I think if you are a sole trader they they are responsible for your tax if you don't pay it. That was the main reason.

olly300

WHA is right you will be forced to either use PAYE or set up a limited company.

By the way some of the best (and cheaper) contractor accountants are not based locally you contact them via telephone and email. I have PMed you.