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I am going on a contract, should I start my own business?

HappyUser
HappyUser Posts: 301 Forumite
in Employment, jobseeking & training
Hello!



I am going on a three month rolling contract with £170pd.
There is an umbrella company available. How much would I save if I start my own business, minus the costs for the accountant etc?


Thanks!
«1

Comments

  • p00hsticks
    p00hsticks Posts: 14,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    By 'starting your own business' presumably you mean setting up a limited company ?



    How long do you envisage the contract lasting ?
  • Brynsam
    Brynsam Posts: 3,643 Forumite
    Fifth Anniversary 1,000 Posts Name Dropper Combo Breaker
    How much will you spend on accountancy costs etc?
  • HappyUser
    HappyUser Posts: 301 Forumite
    The contract may last 1 year. I don't know how much the accounting costs would be.
  • Dox
    Dox Posts: 3,116 Forumite
    1,000 Posts Third Anniversary Name Dropper
    HappyUser wrote: »
    I don't know how much the accounting costs would be.

    Find out, to enable you to take an informed decision. Nobody here knows.
  • PasturesNew
    PasturesNew Posts: 70,698 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    I went Ltd - if I did it again I'd go with an umbrella as it's "easy in, easy out"... Ltd works fine if you see yourself as "running a business" and know how you can use the status to any advantage and have plans to be a Ltd for years to come.

    If you're probably dipping in and out and aren't really sure where this is going to go .... try an umbrella for a year or so until you're sure and have decided.
  • HappyUser
    HappyUser Posts: 301 Forumite
    Are the taxes the same for both choices?
    If I have a second job, which would work best?
  • DavidT67
    DavidT67 Posts: 658 Forumite
    Part of the Furniture 500 Posts Name Dropper
    As a limited company contractor for many years, I'd say choose a reputable umbrella company. Your stated day rate is low and so probably not worth the time and expense of an Ltd and all the costs involved.

    The tax situation with an umbrella will be easier for you to follow. Ltd structure is definitely more complex. Which is more advantageous long-term depends on your personal circumstances and goals.

    I'd suggest going to Contractor UK website and have a read of the FAQs if you have more questions.
  • HappyUser
    HappyUser Posts: 301 Forumite
    Can you suggest me the best umbrella company then?
  • Dox
    Dox Posts: 3,116 Forumite
    1,000 Posts Third Anniversary Name Dropper
    Fulton Umbrellas are excellent.
  • HappyUser
    HappyUser Posts: 301 Forumite
    Is this accurate? It shows that umbrellas are better than accountants:


    https://www.itcontracting.com/calculators/limited-umbrella-tax-calculator/
This discussion has been closed.
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