Being new to contracting you may be a bit dazzled by everything that's going on. You've probably had a few meetings with your recruitment agency to discuss suitable roles, where you'll have been on your best behaviour, of course, trying to come across confident and able for the role on offer. You will be sent for an interview with the client and certainly you don't want to let yourself down in that meeting. All in all you're exhausted and just want to get on with what you're good at.
But landing the contract is just the start. Now comes the paperwork. If you haven't already been told you'll soon find out that however good you are at "widget development ++", engineering or teaching you won't be welcome on your client's site without setting yourself up as a limited company - so you're meant to be a great accountant with no wish for any sort of social or home life as well!
Setting up your own company can be time consuming and complicated. You'll have to be competent with spreadsheets, good at form filling (there's a load of that) and able to understand what the guy at HMRC is talking about - because if you don't all your money will be spent on fines.
Who on earth wants to spend all day at work then come home and sit in front of your PC slaving away at statutory administration? No, you want a life.
Well, don't worry, you have an alternative choice which is painless, effective and very reasonable in cost. It's called an umbrella company. Using the services of an umbrella company is like eating out at a restaurant instead of cooking yourself. No slaving over bubbling pots & pans, timing all the food to be ready at the same time then having to do the washing up. In between which you're keeping your fellow diners supplied with drinks and condiments. No, you walk into the restaurant, order, eat and leave.
Registering with an umbrella company means you pass all your administration to someone else. Set up your own limited company and you'll have to
- Register your company at Companies House
- Complete Annual Returns each year to update Companies House, this requires an annual fee.
- Tell HMRC if the Company has any profits or taxable income in a Company year.
- Complete an annual corporation tax return and pay the taxes within a set time.
- Complete the following documents and return to Companies House:
- Memorandum of Association
- Articles of Association
- Form 10 - Provides Directors' and Company Secretary's Names & Addresses, together with the Registered Company Address.
- Form 12 - States that the Company complies with the terms of the Companies Act
And that's just to set yourself up!
On the other hand, registering with an umbrella company to do all this for you takes just minutes and is no more expensive than running your own limited company - often cheaper. This can be done either on the phone or online here at Contractor Supermarket.
Jim Goddard, from featured umbrella company Oriel Contractors, says "Umbrella companies are designed to make the life of a contractor as simple and stress free as possible. We have a team of dedicated & trained staff all geared up to handle every aspect of a contractor's administration for them. Oriel Contractors' success is down to our commitment of achieving high levels of customer satisfaction. We do this through a range of well thought out practical services and fantastic customer service. We don't rest until every single client is 100% happy!"
Umbrella companies are the future of contracting: fast, simple and extremely efficient.
