Post only on offer for limited company or limited company employee

tikki999

I am self-employed. There is an interesting sessional post that I am interested in with an organisation that states that taking on this position does not make me an employee of the company. Ok, fair enough. However, it stipulates that a successful applicant should either be an employee of a limited company OR set up their own limited company in order to do the job.

Why? I am clueless about this stuff. If anyone can explain it for me, please do.

KiKi

Lots of reasons. 1) Sole traders don't have separate personal and work finances / assets etc, so liability sits with personal assets, and companies don't want that risk. 2) Sole traders may be seen as employees under certain conditions and therefore potential employment rights claims and tax complications which companies don't want to expose themselves to. 3) Public organisations usually have procurement agreements which will only deal with limited companies who publish their accounts, as a protection of public funds.

In short, fewer risks for them.

2) is exactly what they are protecting themselves against in your case. So just do it under an umbrella company.

HTH
KiKi

tikki999

Thank you so much.

Next question, for future reference: What could I gain by establishing a limited company?
Bearing in mind, I've been self employed for a few years and do not earn much.

p00hsticks

tikki999 wrote: »

Thank you so much.

Next question, for future reference: What could I gain by establishing a limited company?
Bearing in mind, I've been self employed for a few years and do not earn much.

Not answering your question, but you don't need to establish your own limited company - there are 'umbrella' companies that will take you on as their employee in order to satisfy the conditions and this is a simpler way round the issue, at least to start with.

tikki999

Thanks for reminding me of this 'umbrella company' angle. I think that was mentioned in the info. Can you say any more about this? How does one go about this?

p00hsticks

tikki999 wrote: »

Thanks for reminding me of this 'umbrella company' angle. I think that was mentioned in the info. Can you say any more about this? How does one go about this?

Sorry, don't know of any names of umbrella companies, but I think many of the recruitment agencies will have them. Basically, you sign up to be an employee of theirs and the emplyer with the contract then does a deal ith them for your services. The umbrella sorts out your tax, NI, holiday pay etc and invoices the end employer for your time.

https://en.wikipedia.org/wiki/Umbrella_company

unforeseen

Giant & Parasol are two of the main umbrellas.

This isn't a recommendation for either as I've never used them.

Marcon

KiKi wrote: »

1) Sole traders don't have separate personal and work finances / assets etc, so liability sits with personal assets, and companies don't want that risk.

That's a risk for the sole trader - the company using their services has access to the whole of their personal assets, whereas limited companies, as their name indicates, are only liable to the extent of the assets owned by the company through which they provide their services.

If the contract is with a limited company, there's no chance you can claim to be an employee and pursue them for holiday pay, pension, unfair dismissal or any the other risks associated with being an employer.

Setting up your own limited company is no big deal, so why not investigate that? More info at https://www.gov.uk/browse/business/limited-company .Much more freedom (and lower costs) than the umbrella route.