Limited company as an IT contractor

GhanGee

I was wondering what it the simpliest way to setup Ltd company for an IT contractor? (umbrella is not an option for me) What would be the easiest, or 2nd easiest after 'umbrella' way, to be able to work as a contractor (Ltd) for a company X. Where do I need to go to set it up, can anyone do it for me, my potential accountant? How much does an accountant cost and how often do I pay him/her? What are other benefits of having a Ltd? I guess this question was asked hundreds of times, but I want to be sure I have up to date 2012 data.

Eoin

moved from work/jobs

unnameduser

Being in the IT game I have looked into this.

This is my 2c.

I reckon you have three options

Go sole trader
Go Ltd company
Use umbrella.

The method that suits you will depend on a few factors including contract amounts, total turnover, number of clients, frequency of invoices and a range of other factors,

I suggest you get in touch with Moroney Accountants. They are based in Limerick but work nationwide. Their advice is honest, relevant and to the point. They'll take a proper look at look at your business and visit you regularly rather than do the bare minimum.

<snip>

Best of luck

GhanGee

unnameduser wrote: »

Being in the IT game I have looked into this.

This is my 2c.

I reckon you have three options

Go sole trader
Go Ltd company
Use umbrella.

The method that suits you will depend on a few factors including contract amounts, total turnover, number of clients, frequency of invoices and a range of other factors,

I suggest you get in touch with Moroney Accountants. They are based in Limerick but work nationwide. Their advice is honest, relevant and to the point. They'll take a proper look at look at your business and visit you regularly rather than do the bare minimum.

<snip>

Best of luck

thanks for your input, this is supposed to be simple contract, one client. It's not like I am planning to build a big company, I will be looking for a new job soon and there're only few options to get permanent and lots of contracts. So I want something simple, something that gives me the oportunity to take a contract when nothing else is available, but I dont want to spend much money on Umbrella co. fees. What do you think is better option for me, Ltd or sole trader?

Thanks in advance

Captain Commie

GhanGee wrote: »

thanks for your input, this is supposed to be simple contract, one client. It's not like I am planning to build a big company, I will be looking for a new job soon and there're only few options to get permanent and lots of contracts. So I want something simple, something that gives me the oportunity to take a contract when nothing else is available, but I dont want to spend much money on Umbrella co. fees. What do you think is better option for me, Ltd or sole trader?

Thanks in advance

If you are only planning on doing the odd contract when you can not get work then I would recommend you look at sole trader status and registering a Doing Business As name (DBA), if you go down the route of LTD then there are lots you have to think about and quite a few costs as well.

srsly78

If you are in it for the long haul then LTD is the way to go. Otherwise go with sole trader.

When you talk to accountant note that you will also need help with your personal tax affairs as well as the company ones. Try to get a deal for accountant to do it all. If you are a one-man ltd contractor then your personal tax affairs are tied in very closely with the companies, but are still different legal affairs. You will need advice about pension, expenses and vat.

Operating the day to day stuff yourself is pretty easy (vat, paye), but you will need accountant to help prepare annual returns. The costs of operating a LTD are just the accountant fees pretty much, but a good one is worth every penny!

One final tip: Avoid "business banking" like the plague :pac:

DublinDilbert

GhanGee wrote: »

thanks for your input, this is supposed to be simple contract, one client. It's not like I am planning to build a big company, I will be looking for a new job soon and there're only few options to get permanent and lots of contracts. So I want something simple, something that gives me the oportunity to take a contract when nothing else is available, but I dont want to spend much money on Umbrella co. fees. What do you think is better option for me, Ltd or sole trader?

Thanks in advance

How big/how long is the contract for?

Sounds like you would be best going as a sole trader. As there's quite a bit in dissolving a ltd company when you no longer need it.

You should talk to an accountant. It will probably cost of the order of €500 for your years accounts returns for a small sole trader

unnameduser

It does sound like Sole Trader is the way to go. Do talk to an accountant so you know how to manage your paperwork etc.

srsly78

Might as well go ltd. Once you are a contractor it's hard to go back as permanent - noone likes taking a pay cut. Depends how confident you are in getting new contracts. Lots of work out there...

GhanGee

DublinDilbert wrote: »

How big/how long is the contract for?

Sounds like you would be best going as a sole trader. As there's quite a bit in dissolving a ltd company when you no longer need it.

You should talk to an accountant. It will probably cost of the order of €500 for your years accounts returns for a small sole trader

I got few replies from different companies and contracts are between 4 to 7 months, as far as I remember there's no contract longer than 7 months. That's the reason I want to keep it simple

Thanks everyone for your advice.

brinty

Go sole trader if its only one contract and your lloking for work.

Setting up a limited co will affect future mployments etc.

I'm an accountant so if ye wanna know anything drop me a PM

srsly78

I just finished a 24 month contract :pac: If you do well you get extensions. Most contracts are initially 6 months yes.

unnameduser

srsly78 wrote: »

Might as well go ltd. Once you are a contractor it's hard to go back as permanent - noone likes taking a pay cut. Depends how confident you are in getting new contracts. Lots of work out there...

The cost to set up and in the future, dissolve a LTD company are probably excessive in this case.

As mentioned by a previous poster with a simple set up in this case the accountancy fees would be quite low for sole trader status

GhanGee

srsly78 wrote: »

I just finished a 24 month contract :pac: If you do well you get extensions. Most contracts are initially 6 months yes.

most contracts are fixed term, just to help out with projects. There might, might not be more work afterwards. Also they're not that big, well, not all of them. It's between 130-200/day.

GhanGee

unnameduser wrote: »

The cost to set up and in the future, dissolve a LTD company are probably excessive in this case.

As mentioned by a previous poster with a simple set up in this case the accountancy fees would be quite low for sole trader status

I agree, I can't guarantee whether the contract gets extended ... and in the future I simply prefer permanent role. So if there's one I want to switch to it (with no hassle)

srsly78

GhanGee wrote: »

most contracts are fixed term, just to help out with projects. There might, might not be more work afterwards. Also they're not that big, well, not all of them. It's between 130-200/day.

Those are very low rates, not worth the hassle of ltd company. Market rates for experienced developers are about double that.

edit: Not worth hassle of sole trader either for that money. Remember you will lose your entitlement to JSA as well.

unnameduser

srsly78 wrote: »

.... Not worth hassle of sole trader either for that money. Remember you will lose your entitlement to JSA as well.

its 130 to 200 a day. Not earth shattering but adds up if there are 4 / 5 days a week.

sartay

Just as an extra consideration - a lot of companies won't allow you to contract with them unless you have either your own limited company or are using an umbrella company. Sole trader is not an option a lot of the time.