Been landed with an issue today. Can I ask whether you consutants out there are sole traders, Ltd company or use an contractor umbrella company? You may contact me direct if you prefer. Thanks

Started as a sole trader but was forced to change to limited company due to general employment of sole traders. I don't know if this holds for the UK but there were companies who employed sole traders for years (say 20years, don't ask why) and when it came time to retire they claimed for the same benefits as a regular staff employee and won. The reason given was that although they weren't actual employees (staff) they were "effectively" staff and so were deemed to be entitled to the benefits, same as staff. This resulted in every company employing sole traders to very quickly inform them all that they were required to become limited companies with immediate effect. The result being that the company can successfully separate themselves from the contractor whenever they want. Don't like the umbrella companies but I know people who do use them. You pay them a cut of what you earn and in turn they take care of things like tax, VAT etc for you.

Operate as Ltd, have a much higher cover of insurances for less premiums.

Not really. There is much that you can write off legitimately. Hire a good accountant and they should save you at least the cost of their fees if not more. also you may sleep better knowing you taxes are in order. Everyone has stories to tell you as to why their way is best of all. I once had a guy tell me he paid less that 20% TAX one year thanks to the "creativity" of his accountant. In the ROI, sole traders (back when I was one) didn't have to pay TAX for two years. Sounds great, except that after the two years is up you have to pay up all the accrued TAX liability at once. Knew someone who fell foul of this "clause" due to a combination of stupidity and greed. As has been said, insurance covers any "errors" you might make. If you're a sole trader it may be possible for the courts to go after your assets, i.e. your house, in the event that you were to be sued.

I agree Heather. It comes down to the employers in the end who should require their contracts have insurance requirements built in as standard.

One agent tried to persuade me to use an umbrella company, but I found them unhelpful and disorganised. They promised the Earth and delivered nothing. Setting up as a limited company cost me about £40. It feels like a big step, but after several years as a sole trader it has opened up more possibilities. Good luck!