Rated as 'better than other accountants' by 98% of our clients - we're working hard to convince the other 2%. 20 years of outstanding customer services.

Thinking of Contracting for the first time?

If you are thinking of moving from permanent employment to contracting or freelancing, then stop for a moment and consider your options.

In particular, you need to set up your new business in the best way possible whilst making it easier for your customers to deal with you.

We've summarised here for you the alternatives along with the pros and cons of each method; you can also read more about 'Moving from a Composite, Umbrella or Managed Service Company' here and for more details about 'how much can I earn as a contractor' visit our new page.

Another page we are sure you will find incredibly useful is: Take home pay Limited company or Umbrella company - The Real Story.

If you are thinking of contracting through your own company click here to read our new straightforward guide on how to contract through your own limited company or download our free step-by-step guide to contracting.

You may also find the following pages, guides and case studies useful:
Take home pay calculator - How much could you be taking home
Limited or Umbrella? Can't decide? - We help you decide which is best for you
Guide to Contracting - All the best guides to contracting in one place
Expenses Guide - Know exactly what you can claim
Umbrella company guide - Everything you ever wanted to know about umbrella company services
IR35 Guide - A great plain English guide to IR35

You might also find our new How to become a contractor guide - illustrated infographic useful.

If you have any question about contracting or would like any further advice please either contact your SJD Accountant or call our new client services helpdesk on 0500 152500 / 01442 275789 or email nikki.hanlon@sjdaccountancy.com.

Your options . . .

Following the April 2007 Budget announcements there are only two real options for contractors:

1. Operate through your own limited company. It is very important to stress that these must be genuine, one person Limited Companies and not a 'scheme' dreamed up by what are nothing more than marketing organisations.

2. Work through a PAYE umbrella company and pay full income tax and full national insurance contributions on your entire earnings. For details of SJD's umbrella company visit www.contractorumbrella.com.

A large percentage of "employment services" companies offering to set up Personal Service Companies or put you in a special 'scheme' are wide open to attack by the Revenue under the new guidelines, and it is unlikely that the major agencies would deal with them. Remember, if they don't have Accountancy in their name they probably aren't Accountants.

Special update: SJD become the first and currently only firm of accountants to have been reviewed and found to be fully compliant with all Managed Service Company (MSC) legislation by KPMG.

Contracting through your own Limited Company

It's often said that contracting through your own limited company is a daunting task. In fact, nothing could be further from the truth.

Administering your own limited company, with the support a dedicated firm of accountants like SJD Accountancy, is simple, efficient and inexpensive.

Contracting through your own limited company does require a little more work than using an umbrella company, you'll need to form a company which will just take five minutes - you can form your company and check name availability by clicking the link, open a company bank account (we can help with this), send in a spreadsheet each month (just like using an umbrella company) and from time to time send cheques off to the Revenue, again we will help you to understand exactly how much to send.

You'll typically take home around 75% - 80% of your contract by working through your own limited company.

Benefits of Contracting through your own limited company:

The most tax efficient way of working, meaning you will take home more money (as much as £15,000 more on a £350 daily rate compared with using an umbrella company).
Claim a wide range of expenses - accountancy fees, equipment, software etc.
Access to the Flat Rate VAT scheme.
Even if inside IR35 it may still be worth it, call us to find out by how much (0500 152 500).
You keep complete control of your financial affairs meaning you do not have to risk your money with any third party administrator.
Running your own business isn't difficult; submit spreadsheets to your SJD accountant - just like Umbrella time sheets and expenses.

Downsides

There is a certain amount of paperwork involved, usually about 10 - 15 minutes per month.

Using an Umbrella company

An Umbrella service is where you are essentially an employee of the umbrella. The way it works is that your client or agent enters a contract with the umbrella for your services, and you enter into a contract with the umbrella. Click here for details of our award winning umbrella service.

You'll typically take home around 60% - 65% of your contract by working through an umbrella company.

Benefits

Very easy to use, you simply enter your timesheet and expense details and wait to be paid.
All tax and NI is deducted before you receive your money, so you will have no further taxes to pay.
Ideal if your contract is less than three months.

Downsides

You will receive a salary that is subject to full PAYE Tax and NI, it's just like being a permanent member of staff again.
You are reliant on the umbrella company to collect your money from the client or agent and then to pay it on to you.

Composite/Managed Service Company

Following the April 2007 Budget it is no longer possible to operate through a Composite/Managed Service Company. You must operate either through your own limited company or through a PAYE umbrella company.

SJD Accountancy

SJD Accountancy are the UK's largest specialist provider of fixed fee, limited company accountancy services to contractors; we've been acting for contractors across the UK since 1992 and have more than 11,000 clients.

We are the only National specialist firm of accountants with offices in all major UK cities so you’ll never be far from your accountant. SJD also have more qualified staff than any other firm in our market with qualifications from the following major tax and accountancy bodies - ATII, ATT, ACCA, CA, ACA, FCCA, ACMA. You’ll also be pleased to know that we are one of the lowest priced as well.

Free face-to-face meetings. This is another unique service, only SJD offers free face to face meetings - tax is complicated and sometimes only a meeting will do.
Unlimited access to your own dedicated accountant. No call centres, no outsourcing, no automated call handling. Simply telephone, e-mail or meet your own dedicated accountant face to face.
Money backed service guarantee. All your telephone calls and e-mails will be answered the same day or we will refund your monthly fee's.
Outstanding reputation. We have won more awards for customer service and accountancy excellence than any other firm in our market.
All inclusive low cost monthly package which includes completion of accounts, payroll bureau, dividends and corporation tax computations, personal taxation, free bookkeeping software, unlimited access to your accountant and all company returns.

All this for a fixed monthly fee of £110 plus VAT, which is one of the lowest prices in the market. And most importantly, in a recent survey 98% of our clients rated SJD as 'better than other accountants' - we are working hard to convince the other 2%!

Appoint SJD Accountancy and never worry about your tax or accountancy affairs again!

You may also find the following pages, guides and case studies useful:

Take home pay calculator - How much could you be taking home
Contractor FAQ - All your frequently asked questions and their answers
First time Contracting or Freelancing? - A summary of the alternatives along with pros and cons
Choosing an accountant - For a full review
Step-by-step Guide to Contracting - Download a FREE copy of our guide
Limited or Umbrella? Can't decide? - We help you decide which is best for you
Guide to Contracting - All the best guides to contracting in one place
Expenses Guide - Know exactly what you can claim
Umbrella company guide - Everything you ever wanted to know about umbrella company services
IR35 Guide - A great plain English guide to IR35
Contractor tax - Read our great new plain English guide on understanding what taxes you'll pay as a contractor