Contractor outside of IR35: Umbrella or limited company, accountant or DIY?
I've been a contractor for 3 months and have had Giant, an umbrella company, process my pay. I take home under 60% of what I make despite claiming (very humble) expenses. I have just won a new contract on a lot of money so want to make sure I do the right thing and don't get ripped off. I've been told that my contract definitely falls outside of IR35 and has been especially written that way. I'm thinking I should go limited company and do the company formation myself, or would I be better getting an accountant to deal with everything for me or a specialist online contractor accountant service or something. I've found so much conflicting information online but it's all biased, before I started last time Giant gave me a quote telling me I'd get over 75% before I started and that was clearly rubbish! What do you guys do/ recommend? Any responses gratefully received! :) PS. I'm based in Berkshire so any accountants etc. around there even better!
United Kingdom - 2 Answers
People Answers, Critics, Comments, Opinions :
Answer 1 :
I would go and speak to 2 or 3 accountants - any good firlms will be willing to offer you an hour of their time to explain the pros and cons of each alternative and to tell you what their fees are. I have to say that putting the company and PAYE stuff in the hands of a good, local accountant will save you loads of hassle, fines, etc.
Answer 2 :
Whether you need a company or not depends to a large extent on what work you do. If, because it's your fault (mistake etc) something goes wrong, what could it cost in terms of injury to other people; wasted materials etc? If the answer is "a lot", form a limited company, then any mistake will cost you no more than the company's assets. Without a company you would pesonally be at risk. If not much is at stake, just be a sole trader - the annual cost is less than the cost of running a company. Either way get yourself an accountant. They can advise finally on which way you ought to go.Dig out a few names from Yellow Pages then, before you call them, go and have a look at their business premises. Discard those that operate from home or a shabby looking office. Disregard those with very large, plush-looking offices (they'll charge hefty fees). Make sure the name plate has the letters ACA or FCA or ACCA after the name. From the resulting shortlist select one that you like the look of and give them a call. For the sort of advice you will need they should all be quite capable - yours is a common situation. Do ask about the accountants' fees (though it won't actually cost you as much as they quote because you will be able to deduct them from what you'll have to pay income tax on). Also, get clear with them what record-keeping you'll need to do. Poor records result in an accountant having to spend more time, which leads to higher fees.
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