contract or sole trader

churrusco

Hi there,

I have agreed terms with a company to contract with them. However, they are keen to support the possibility of hiring me as sole trader.

Which option do you think is better having in mind it is my first contract?

Thanks very much!

watna

I'm not quite sure what you're asking. As far as I know, when you contract there's too options. Setting yourself up as a sole trader or as a limited company. Do you mean should you set up as a sole trader or ask the company to hire you directly for 6 months?

Setting yourself up as a sole trader would be better if you plan to stay contracting.

churrusco

Yes, basically those are the options. Being a sole trader or a limited company. I've been already browsing the forum but still do not have very clear.

My idea is to keep contracting for several months, perhaps a couple of years. I know that a sole trader is exposing himself to liability but company seems quite ok. Also, probably as a sole trader I could be able to keep the accounting myself, not sure how hard can it be if you are a limited company but guess you are better with professional advisory in that case.

watna

As far as I know it really depends how long you want to contract. We always advise people if you want to contract for a few years to set up as a limited company. That way you'll get a pension etc. You just need to make sure to get a good accountant.

Some people also go under an umbrella company if they're not sure about the sole trader/limited company route.

churrusco

watna, thanks a lot for your advice.

I don't think I would spend much more than 12 or 18 months to be fair. So my main doubt is whether go through the limited company path or just plain sole trader. I discard working through agencies or umbrella companies, I just prefer to track things closer.

As I said, my company is kindly open to both options. Having my own company is appealing because it can help you with other posible business but setting yourself as a sole trader seems extremely easy on the other hand.

Argh

qwertz

Do they give you the option to initially work as a sole trader and then switch to a limited company?

churrusco

Actually, they do, but it seems everybody there is on their own company, so guess following that path will be less messy.

Now is time for having to deal with all accountancy firms. It seems that they recommend you to go under the umbrella way something I would prefer not to do.