Welcome to Our Community

Wanting to join the rest of our members? Feel free to sign up today.

Sign Up

Advise for a upcoming short-term contract(potentially longterm)

Discussion in 'General Forum' started by Jai, Aug 30, 2018.

  1. Jai

    Jai New Member

    Hello

    I was wondering if someone can advise please.

    My situation is that I am a full time employed with a large company earning an amount of £47000.

    I have been looking for additional work and currently have a contract for 9 week duration with the total worth of £8550.

    I am required to make a decision wether to open up a limited company or go down the umbrella route. I understand if I go through a limited company it is usually paper intensive and recommended for the long run, however, I don't know if I will get more contract such as 9 week contract or my current contract extended after the 9 week duration.

    Going down the umbrella route means that I will have to pay higher rate tax, which I wish to avoid.

    I still somehow think limited company route might be a better option - If I don't get any further contracts then I assume it is just making a company dormant and file returns with the company house.

    Ultimately my main aim is to maximise the return on the £8550 without being over paying tax. I am seeing a local accountant in London next monday and wanted to find out as much information here I could before so I could ask him the correct question.

    I am also happy to include another person (my ex if it makes a difference!) as a shareholder or an employee of the company if it helps? I also don't have a need to withdraw the money straighaway from the company and happy to leave it there so I don't have to pay tax on my income, if this helps?

    I also understand there are corporation tax to be paid on the profit on the company (turnover of £8550 less expenses). The expenses for the 9 week duration are I have mortgage bills to pay (I will be working from home monthly mortgage amount of £1300), electricity, gas, and also some travel which I can show on my monthly travel card which is £235 - Although the work is primarirly based from home I still have to travel to clients site.

    I have heard that if you have more shareholders in the company then each can take £2000 tax free - I didn't understand this completely.

    I would be grateful for any advise you can give me based on my above circumstances explained above! If you need any clarifications please let me know.

    Many thanks
     

Share This Page