So you’ve decided to take the leap into contracting. We know, you’re nervous, but it’s exciting too isn’t it? As your research will have shown, you have some important decisions to make; there’s a lot of choice and so many factors to take into account, so we thought a simple breakdown of the ‘first steps’ could help.
The first factors to take into consideration are:
- how do you set your rate?
- should you use your own limited company or should you look to work via an umbrella company?
Do your research
We recommend that you research the sector you are looking to enter: you will need to talk with your peers, your ex-bosses, possibly even your current boss, any contractors you have worked with, and specialist recruitment agents for your field.
Speaking with all these different people will enable you to see what is needed in the market place and where you will fit in. You will be able to assess the potential there is for you now and for the future.
Consider the best working arrangements for your business
The big decisions at the start boil down to what is going to be best for you financially and just as importantly, how easy will your clients find it to work with you. You will be asking these questions to ensure that in the long run you end up with more money in your back pocket, and that your clients find it a pleasure to work with you, so they refer you when asked for a solution and your reputation and CV grow.
The most tax efficient way for you to work in this market will be as director and shareholder of your own limited company as long as your contract and your working practices mean you fall outside of the IR35 rules and regulations.
Running a limited company is easier than you think
Contrary to popular belief, running your own limited company is not overly difficult or time consuming to do, with a specialist accountant to advise you every step of the way you will find it becomes second nature in no time and that for as little as an hour a month you end up financially streets ahead of many of your peers with a good life / work balance.
Working through an umbrella company will usually suit people who really do not like paperwork or are on a short term contract between full time roles. Many umbrella companies are internet based with simple portals for you to enter your timesheet details and expenses, so they can invoice your client, collect the money and pay you. This route means you are still required to do a little paperwork but not much, although your take home reflects this and often quite notably so. If an umbrella solution is the right route for you then the following link is a good place to start: http://www.allumbrellacompaniesareequal.com/the-charter.html
What expenses will you have?
Working through your own limited company means you will be able to claim a far wider selection of expenses than working through an umbrella company, you will also be able to register your company for VAT and this will typically bring the advantage of the VAT flat rate scheme which could generate an additional income of up to £4k on a contract of £80k.
Before deciding whether to use an umbrella solution or a limited company why not request a free initial face to face meeting or telephone conversation with one of our accountants contact us
Why Integro Accounting?
Integro Accounting is the UK’s only specialist provider of fixed fee, limited company accountancy services for contractors, consultants and freelancers that was established to an award winning standard – our Practice Manager, Maria Williams, won The British Accountancy Awards’ ‘Accountant of the Year’ in 2011.
We were set up with the vision of providing a service that is the ultimate for the dynamic, busy professional of today in a language you understand.
Integro Accounting have designed a bespoke service for the contractor who is always on the go; never forgetting that one size will never fit all.
The relationship you have with your accountant is the most important factor in our service which is why we will always offer unlimited contact with your own personal accountant; whether that contact is via the phone, email or face to face.
We have our 3 offices located in London, the South-West and on the Bedfordshire and Buckinghamshire border. There are also meeting locations in many of the major cities and towns across the Home counties, South-West and South Wales, all conveniently placed so that you never have to travel far to meet your accountant.
If you have any questions about contracting or would like to find out more about how Integro Accounting can help you and business please call Christian on 01525 303984, email email@example.com or request a callback.