Switching from umbrella company to ltd

[mojo]

Hi everyone,

I was thinking of switching to my own limited company at the end of my current contract, but seeing the benefits on offer thought **** it might as well bring it forward. For anyone who has been there and done it, how painful is the process of switching from using an umbrella company to invoicing yourself?

Are umbrella companies usually a pain in the *** about you leaving? Are recruitment agencies woeful? And just how much extra work am I looking at by dealing with the accounts department at the recruiter myself? Do they often 'lose' invoices? (My account mgr at the brolly says he is constantly chasing up agency payments, but not sure if he's just justifying the fee!!)

[Bully's Special Prize]

You shouldn't really meet any problems mojo, the umbrella company will just give you a P45 and I'll be surprised if they give you any trouble.

As for the agency, just keep on top of them - get your consultant on board and see if they'll do some of that side of things, but also don't be shy about calling the accounts department to bring them up to speed.

Send off your first invoice, and then call them to check it's been received and all is fine with it.

[bez]

Hi mojo,

I've done this myself. It was tougher finding the right accountant to go with than switching things around to be honest.

Well, that and sorting out a business bank account.

I wouldn't sweat it, and if it's the right thing for you to do I'd go for it.

[WYSIWYG]

Originally Posted by mojo

Hi everyone,

I was thinking of switching to my own limited company at the end of my current contract, but seeing the benefits on offer thought **** it might as well bring it forward. For anyone who has been there and done it, how painful is the process of switching from using an umbrella company to invoicing yourself?

Are umbrella companies usually a pain in the *** about you leaving? Are recruitment agencies woeful? And just how much extra work am I looking at by dealing with the accounts department at the recruiter myself? Do they often 'lose' invoices? (My account mgr at the brolly says he is constantly chasing up agency payments, but not sure if he's just justifying the fee!!)

I looked into all three options when I started contracting (Offshore, UK Umbrella Company and my own Limited Company).

I eventually decided to go with the umbrella option and stuck with it for about 3 months before setting up my own company. The process of leaving the umbrella was fairly straightforward - I just stopped sending in timesheets! In total, it took about a week to form my company, another 4 weeks to get a company bank account and around 8 weeks to get the company registered for VAT. Any accountant that uses headline grabbers like "You'll be all setup in just 4 hours" is full of cr*p.

Hope this helps
Iain

[AlPidwell]

Hi Mojo,

Switching from an Umbrella to Ltd company should be really simple. Send an email to your Umbrella company informing them that you are looking to leave (ideally give them sufficient notice to process any outstanding expenses) and ask them to issue you with a P45.

Thats it; I would advise checking where you stand with regards to IR35 to make sure you can claim dividends without having to pay ENI on them (there will be tonnes of people who can advice you about that) and make sure that you look into any insurance requirements your end client may have, specifically Professional Indemnity, other than that you should be good to go!

[TheFear]

Originally Posted by AlPidwell

Hi Mojo,

Switching from an Umbrella to Ltd company should be really simple.

Correct, it should be. When I moved from umbrella to LTD it was a total nightmare.

My umbrella were generally very proactive when I was a live contractor. As soon as I told them I was off, they turned into a bunch of unhelpful idiots.

[AlPidwell]

As an account manager for an Umbrella company I'm curious to know more about your experience, could you pm me as I'm guessing the forum has a fairly rigid set of rules about flaming and direct bashing.

Seems to me to be a very negative approach business, I would like to think that all of our ex-umbrella contractors would recommend our services to people who are new to the contracting world and don't want to go down the Ltd company route.

[Vaseline]

Originally Posted by AlPidwell

As an account manager for an Umbrella company I'm curious to know more about your experience, could you pm me as I'm guessing the forum has a fairly rigid set of rules about flaming and direct bashing.

Seems to me to be a very negative approach business, I would like to think that all of our ex-umbrella contractors would recommend our services to people who are new to the contracting world and don't want to go down the Ltd company route.

Are you allowed to tell us who you work for? Come on, don't be shy! Hugo from Gabem hasn't got a problem with it and Dave from JSA (or was it his Sock Puppet?) gave us a good giggle a few months back for all the wrong reasons