Going it alone (Umbrella Companies?)

[Paul2012]

Hi,

I have been mulling this over for some time, but I am wanting to start my own business, I don't have a mortgage or any other debts tying me down (I'm in my mid 20's)

I currently work full time for my employer, and in my contract it states, I'm not to engage in any other business outside of my employment.

Which is fair enough, I understand why that is in my contract, and while it may be against my contract, I want to progress to starting my own business anyway,but limiting the risk that I get fired, before i'm ready to tell them what I am doing.

I have 6k in savings to keep me going (rent, food etc which if need be I could stretch that 6-8 months if needs be, tins of beans and 15p packet noodles will do me fine ), however I am wanting to build up business as well so I can hit the ground running before quitting the day job.

My first thought was a limited company, but within days Imy name and address is going plastered across the internet as a company director, result instant dismissal.

So really I just wanted to know what other option are available.

One suggestion I have seen is a umbrella company in the UK (parasol group), where essentially they do all of your PAYE NI contribution and take 10 %, which is fair enough for me, but umbrella companies seem a little shady to me, my thoughts with this are that the people in payroll at my current employer wouldn't they see my earnings jump up for example when doing my p60, or could I get could I agree to sort out my own tax if a leave it in an account, and pay tax on it when I form a limited company.

What are your thoughts?

Thanks Paul

 

[TotallySport]

Can we ask what sort of business your planning on starting? and is this the same type/sector of business your currently employed in?

Also if the answer to the second question is yes, you also need to check to see if there is anything in your contract that stops you trading in the same sector for a period of time.

 

[Paul2012]

I'm in IT, more specifically software and website development.

I believe there is a clause about not poaching clients, but nothing specifically about starting within the same industry, or distance etc.

 

[TotallySport]

You need to check, also ring acas for advise on this, they should be able to give you more advice as you can discuss it over the phone.

If they do, you could end up in trouble down the line, but that isn't always the case, which is why i suggest you ring acas as your starting point.

Just because your name will be on a web site, doesn't mean your boss will be looking for it, so they are unlikely to find it.

Its also alot cheaper and easier to start as a sole trader, unless there is a real reason to start as a limited company.

 

[Paul2012]

If I set up as a sole trader, is there any way for my company to find out?

Also what about the tax, for example the people in payroll discovering I have another income? E.g would self assessment be a separate line of tax that they wouldn't be able to esquire about with HMRC, some one said to me I can set another tax code, now as I have always paid PAYE so I'm not too au-fait with other types of personal taxation.

 

[TotallySport]

TBH i am not an expert in any of this, so please take it with a pinch of salt, acas might be able to shed some light on it, and also post in the accounting forum for more info.

If your a sole trader you would have to register as self employed with HMRC, which would change your tax code, in most cases its unlikely that your employers HR department look at it, but there are no guarantees.

Sole trader or limited company has the same chance of being found out, if your not in competition and its not effecting your work, its unlikely the company will care. The difference is being a limited company has alot more paper work, a lot more accounting is a lot harder to close (in comparision). A limited company also has benefits, like limited liability.

 

[Newchodge]

If you tell HMRC that you are self employed as well as employed, it won't affect your tax code, you will merely be asked to complete self assessment. If you register when you get your first customer, say January 2013, your first self assessment won't be due until January 2014, by which time you should have gone it alone or not.

The big downside is if your employer finds out and dismisses you for gross misconduct. That doesn't look good if the project fails and you want anothr job.

 

[mrods]

Hi, it may be an idea to test the waters with an Umbrella Company, I have been with an umbrella company for a few years and had no problems, it also means I don't have any additional costs involved in setting up your own limited company. Unless you can guarantee you are going to continue this for over a year, then you could be out of pocket anyway.
Best advice I can give is look for a UK based umbrella company, steer clear of offshore, make sure you talk to them and that they breakdown all the payments you will be making. As sad as it sounds you get what you pay for, so don't go with someone offering unachievable 90% take home pay!! More than happy to recommend some companies you could call if you PM me.

 

[SetupaCompany]

Have you spoken to your employer about any of this?

Most companies insert this clause in their employment contracts but it doesn't mean that if you speak to them they will not be able to make an exception for you.

If they are a reasonable company they will at least be willing to discuss things with you, and who knows if they like your idea they may even be interested in investing in it.

Of course the downside is if they refuse they will be more suspicious of what you are doing and may be on the lookout for signs you are breaking the contract but if you have a good relationship with them I think it is certainly worth mentioning to see how supportive they will be.

 

[businessfunding]

I would say it is too early to take on an umbrella company - there is nothing preventing you from starting up as a sole trader, which keeps you fairly invisible.

 

[Billmccallum]

Hi,



I currently work full time for my employer, and in my contract it states, I'm not to engage in any other business outside of my employment.



Thanks Paul

you have a contract that excludes outside trading !!!!!!!!!!!!!

 

[Paul2012]

Thanks for the advice, I have got a meeting on Monday with an accountant to discuss my options.

 

[Jet Virtual]

Hi,

I have been mulling this over for some time, but I am wanting to start my own business,

Stop mulling and get going