1st Time Contractor

"I would highly recommend your company's services to any new customer to London in a similar position to myself." Allan Chapmann

Use Our Free Contractor Tax Consultation

How to Start Contracting

As a first time contractor the information to digest can be overwhelming. London 1st therefore takes a systematic approach to get you started and make the right decisions at the very beginning.

1. Book a free consultation with one of our expert company-start-up consultants either in person or via the telephone or you can start the consultation now by navigating to http://www.taxprojector.co.uk .In the consultation we will determine your unique requirements and guide you on the important decisions you need to make. See what you can expect from the consultation.

2. Set up your contracting structure (with our help if you need it) or directly online via our web site.

3. Choose which service will suit you.
Our services are structured to help you at whatever level of support and budget you want. If you start with maximum support, don't worry too much about being trapped in a one dimensional service because at any stage you can change to a service and support level that will suit your needs and your budget. 

If you are uncertain how to discern a good contractor accountancy service from a bad one read our What Contractors Should look for in An Accountancy Services Provider

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 0207 471 9330

Free Contractor Start-up Consultation

You simply have to register on our online tax projector and one of our expert contractor consultants will contact you and help you make the best decisions for your contracting future. It is absolutely free with no obligations and you can do it by chatting over the phone with our consultant talking your through our interactive financial projector or you make an appointment to see us in person.

  1. Choosing the right structure. Limited company or Umbrella solution?
  2. IR35. How this may affect your choice of structure and  take home pay.
  3. Should you be registered for VAT?
  4. How to safely set up your choice of structure for maximum return.
  5. Investments and financial planning – Should you be investing surplus income

After your consultation, we will e-mail you a contractor start-up analysis including our recommendations and a projection of what you can earn.

Use Our Free Contractor Tax Consultation

Free consultation button

 0207 471 9330

Limited Company or Umbrella?

Your decision should weigh up several factors:

  1. Inside our outside IR35 - Inside IR35 we would recommend an umbrella unless your income is above a certain limit. Outside IR35 you should consider a limited company.
  2. Are you prepared for the responsibility of becoming a director and are you eligible for UK directorship? Responsibilities are not so daunting if you enlist the help of a good accountant.

This is not a simple decision and we would recommend that you contact us for a free consultation on your best options.

LIMITED COMPANY 

 SPRINGBOARD UMBRELLA

STANDARD UMBRELLA COMPANY

Advantages
Director has complete control of Company matters and transactions, Director has complete control of Company matters and transactions Minimal administration or accountancy worries.
The most tax efficient way of working More tax efficient than standard umbrella. Ideal for first time contractors. Suited to short term contracts, or contractors between permanent jobs.
Greater opportunity for tax planning No set up costs No set up or closing down costs.
Full control of revenue. Paid directly into the company bank account, rather than passing via an umbrella company bank account Full control of revenue. Paid directly into the company bank account, rather than passing via an umbrella company bank account  
Smaller tax burden (higher percentage net pay) for contract revenue earned outside of the IR35 legislation. IR35 does not apply . IR35 does not apply
Is not as difficult as it may seem, especially if you enlist the help of an accountant Easy to use with the help of your accountant.  

Disadvantages
Some administration, paperwork and deadlines, although you can get your accountant to do this for you. Minimal administration which can be done by your accountant Tax inefficient compared with Limited outside IR35.
Contractor responsibility for IR35   Reliant on umbrella company provider to ensure they collect money from your client/agent hence you might endure a delay in payment.
Not suited for individuals intending to contract for less than 3 months Not suited for individuals intending to contract for less than 3 months Not suited to long term contractors.
    Standard umbrellas are under attack and could be adversely affected by future legislation. Read more
    There is an element of risk in trusting  a third party to collect money on your behalf and pay the taxes

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 0207 471 9330

Pros and Cons of Contracting 

Should you be contracting? Chances are you have already weighed up the decision but the following should help you decide.

Pros of Contracting

Cons of Contracting
  • Contractors can structure their income through Limited Companies or Umbrella Companies to earn more.
  • It is likely you will increase your charge out rate and earn more gross income than as a permanent employee.
  • Flexibility is one of the great advantages of contracting. You can plan your contracts around your own time schedule and you will have more say in how you perform your work. This will give you flexibility to tackle other projects (fixing up your house or taking those long travel trips you have dreamed of).
  • The nature and flexibility of contracting is the best way to evolve a business. Contracting will teach you some business sense and as you develop your skills you could hire staff to do your basic work giving you time to secure more contracts. A contract can provide you with income while you grow your business.
  • It is often more difficult to secure loans if you are a contractor as lenders prefer the security of a permanent salary to contract income.
  • You are unlikely to secure employee benefits such as sick pay and holiday pay.
  • There is more financial risk being a contractor. A number of factors such as a market downturn could reduce your rates and your prospects of securing new contracts. If you are sick or disabled you may earn no income.