UK ILXORS: How Do I Shot Ltd. Company?

I think you only need a Ltd Co if you're going to be making and spending loads of money and need the VAT registration and things - you'll probably be ok with being a sole trader. It's free to set up and it's really easy to do it all over the phone. http://www.bytestart.co.uk/content/19/19_1/limited-company-or-sole-t.shtml (I couldn't find a handy guide on the hmrc website, although there probably is one somewhere).

Incorporating a company is a doddle. Even more doddly is buying an off the shelf company (price varies) and changing its name (£10 or £50 if you want same day service). Sole traderism is not a good idea if you are actually trading - your personal assets are gettable by your creditors if your business owes them money. Setting up a company ring fences your liabilities.

Umbrella companies? Anyone? Why does this all have to be so confusing?

(I'm not actually trading, just contract working. For now.)

Yeah, if you are good at paperwork and paying bills on time (and judging by your comments on Watercooler, you is), it's worth the hassle and yes it is easy to set up.

Pick a cool name, add "Ltd" and you're away.

Of course, getting a 'general' trading company means you can do any kind of work / get paid through it. Be your own record/art company as well!

.. plus, charge your utensils and get the VAT back, and so on...

I am certainly NOT good at paying bills on time and remembering paperwork. Which reminds me... council tax! Argh! At least I narrowly managed to avoid going into the overdraft this month so I can pay it now.

Being mine own record company would be good, mind you.

Umbrella companies are great if you're just gonna be contracting for another firm - they pay the umbrella company, then the umbrella company pays you through normal PAYE, need for you to set yourself up as a ltd co. And apparently most of the tax loopholes you got as a ltd co. have been closed, in the IT industry anyway, so there's no longer a tax advatnage to doing it.

IR35 is the new tax thingy. If your contract means you work as though you were a direct employee of the company - at their premises, using their equipment - then you get taxed at a similar rate, the benefits and savings you could have made as a ltd co no longer apply.

ah, so buy/use your own laptop.

If the company you are at refuse to let you use yours, well, that's not altering the fact that you 'use' your own, or at least have it with you, etc/.

Well it's not quite that simple. Here's an overview of the kind of questions used to determine whether one is an employer or employee:
http://www.hmrc.gov.uk/employment-status/index.htm#1

erk, i mean whether one is employed or self-employed

Can they get overtime pay or bonus payment?

Whoa! That was a big no question right there!

so if you are a self-employed contractor you can't bill your clients by the hour?

if i were to want to start a ltd company (or sole trader), and need an accountant - how much per year is that likely to set me off?

and if i have the time is it possible to do the accounting myself?

You can, but you'll need accountants to ratify and do the statutory paperwork.

Thesedays, it's probably easier and better to pay a %age to an umbrella company.

But then ...

Wait, wait, I might get a bonus if I refer you to my umbrella company! I'll split it with you!

(I have no idea if mine is any good or not, I picked it at random from a list provided by my agent.)

which one? i went with parasol on friends recommendation but they're all probably all much of a muchness.

when i say "went with" i mean signed up with two months ago but have not had a lick of work since ;_;

What sort of order of scale are the tax advantages? 10% of salary, or more?

From the IR35 guidance, it says:

The worker could take the money out of the intermediary, normally a Personal Service Company, in the form of dividends instead of salary. As dividends are not liable to NICs, the use of a dividend remuneration strategy results in the worker paying less in NICs than either a conventional employee or a self-employed person. And PAYE would not apply to the dividends.

Does this save enough to be worthwhile?

And is there a problem later with state pension etc if you haven't paid your NICs?

Damn, Ledge - that's who I'm on! Wish I'd known that was who you were with, or I could have given you the recommendation £££.