Hi dotters, has anyone been asked to setup as a LTD but to do Freelance work? any advice/tips would be much appreciated!
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- Many times! Setting up an LTD in the UK is the easiest process. You can do it yourself, just google Set up an LTD, and there is a process that will take you through all steps. It takes a couple of days, and it can cost as little as 12 GBP. If you are interested in being an LTD, then the UK is one of the best countries to be one.
- Hey Ash. I've been freelance for 17 years now and it's never been asked of me how my business is set up. No matter what size job, it's never been an issue that I'm a sole trader. Hope that helps!
- Hi Ash. Just to throw another opinion into the pot: if you are a sole trader, there's not a need to do anything other than make sure you are registered as that kind of business, and registered with HMRC for self assessment – these are easy things to Google and do in minutes. In my experience, I've not met a client yet who's insisted I am registered as a limited business. They may find it inconvenient, but it's not generally a blocker.It shouldn't be necessary if you're just starting out alone, it's the sort of thing you'll get around to once you've established you're setting out as a freelancer or business in the longer term, or you have suppliers from whom you're regularly purchasing goods and services – they're the people who need the reassurance of dealing with you as a Ltd business, and you would need to be considering VAT registration as well. Otherwise, if they're still insisting, do so if the rewards are great enough, because there is a considerable setup cost.And as others have suggested, try to avoid umbrella companies if you can! Good luck!
- This is atypical. You decide how to legally structure your business in accordance with what you are selling, how you are selling it and what is most appropriate and beneficial to you within the guidelines that you can find on gov.uk. I sound like your mum but this is very much none of your client's business so be firm.
- I would think twice about setting up as a LTD company with IR35 kicking in April. You might be better off going with an umbrella due to the amount of tax you will have to pay.
- @Katy Needham Hi katy, thanks for your response and the info with reagrds to umbrella company. Its a good point, with covid thats also something else that I am trying to get my head round and figure out the best option.
- @Luke Freeman Hi Luke, thanks for the response and link. Will check this out to see if its a better solution.
- @Paul Atchison Hi Paul, thanks for your response. A client has asked for this and as you mentioned there's quite alot involved. They haven't said if it is in terms of who they work with. So maybe this is something I need to go back to them on. My main concern is that they only want work on an Ad hoc bases so I am not sure if its the right route to go down.
- Hey Ash, I would definitely recommend setting up as an LTD company. Umbrella companies can take quite a big percentage (maybe accommodate for this in your day rate if you go with an umbrella?). Crunch accounting helped me to set up as an LTD company and they’ve been pretty good so far! Good luck!
- Hey Ash,I've had this request before. A Ltd co gives a bit of reasurance to the company that you are responsible for paying your own tax (or so I was told at the time).You can get around this by joining up to an umbarella company who will invoice your client on your behalf and pay you as an employee with all the tax and NI already paid.I went with the umbarella co. at the time but would only recommend it to you if you plan on being freelance for a short amount of time (months). In the end it really screwed me over when it came to getting government support through Covid as I had no records of my own earnings as a slef employed person.Hope this helps. Happy to share more info about it if you have any more questions.I'd recommend speaking to an accountant, they set up companies all the time and can deal with the headache for you.Katy
- Yes, for Wieden and Kennedy I had to use Parasol Group, which is a umbrella company. They take a %https://parasolgroup.co.uk/
- Hi Ash, has a client asked you to set up as LTD as that's their terms of who they work with? There's quite alot involved, not that I'm LTD but looked into it. There's definately advantages but would take some setting up. If it's for a long term client then might be worth it.
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