sole trader vs Umbrella company

G

giblet

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Hi Guys,

I'm an IT consultant and been working as a sole trader for 5 years now

I am starting new contract and this company just want to deal with me as a ltd company and not sole trader.
What would be the reason for this ?

I have checked out one particular company that sets up off-the-shelf companies , however the charge a 5% rate monthly - this sounds crazy to me after being a sole trader - 0% charge

Can anyone recommend any good people that set up companies for contractors or should I just do this myself

A few recommendations/pointers to get me going would be great


Thanks a lot
 
You need proper advice.

If this company told you to jump off a cliff would you?


Why don't you just say that you cannot deal with them as a LTD company as you're a sole trader. Perhaps the company is afraid that Revenue will judge that you're an employee and they'll have to pay PRSI etc.
 
Good points Joe !

I would like to revert back to them and stick with Sole Trader, at least for the time being. The company is afraid of some tax issue alright as the guy I am dealing with mentioned this.

The contract is for 3 months so I cant see how the revenue could see me as an employee, perhaps the company are just worried that it turns into a rolling contract over longer period and I will then start to look more like an employee
 
I think the company may have tax obligations regardless, so therefore they still may wish that you set up as a limited company, or else they will have to fill in a load of internal tax compliance forms. Lots of admin for them that they may try to avoid at all costs!

My recommendation is that you push the sole trader issue with them and tell them it's not in your interest to set up as a company. See how far you can push them. If they insist on the company route, and if it's only for three months, then it might be worth looking at the umbrella route.

Words of warning though - I know a couple of people who started for "only three months" with the umbrella strategy and are now regretting it 12-18 months later (i.e. with hindsight if they knew it would have been for longer they would have set up a company).
 
Thanks for thoughts Bob,

Thats exactly what I will do. Ill push the SoleTrader option first as its just too cost prohibitive to do umbrella route for 3 months.

If they really force my hand, ill just do the research , register with the CRO over the next few weeks myself and use my accountant to file any tax obligations during the year for a lot less than the €300 euro per month this umbrella company are looking for.
 
If you're up for doing it yourelf, you might find that you don't even need an accountant !! As far as I understand, there are no obligations for you to have audited accounts unless you turn over €1m+
 
There will be extra costs for you if you have a company, so you need to increase your prices if you want to earn the same amount as before.


Do you need a second director for your company? Who will that be?
 
If they insist on company route, then yes I will pass the extra costs onto them. Second director would be the brother
 
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