In this guide you will find a list of agencies and the industries that they specialize in as well as accounting information to help you set up your own consultancy firm. This guide is primarily catered towards those who are either in the UK or a considering relocating to the UK in a wide variety of industries in the near future as well as those who may not be considering the UK beforehand but will upon reading. I have zero affiliation to any of the agencies in this list. This list is comprised by looking at the clients my firm act for and noting what agencies they use. There are many more out there.
My background is accountancy and I have prepared work for many different subcontractor/consultancy firms.
Why should you be a consultant?
There will come a point in your career when you have all the experience and knowledge you need but will want to increase your income. Consulting makes perfect sense, as you will be paid a premium over the company you’re contracted for employees.
Fuel Recruitment
IT, Consulting, Telecoms, Engineering, Marketing
Volt Europe
Engineering, IT, Life Sciences, Telecom, Data & Analytics
Computer People
IT – a very large variety, too many to list
Lorien
Engineering, Financial Services, Insurance, IT sales, IT services, Pharmaceuticals, Transport and a few others
Rullion
Too many to list but includes, Civil Engineering, Petro-chem, Legal, Mining, Finance
Perform IT
Ireland based IT
LA International
Defence, Engineering, IT, Finance
Ricardo
Environmental & Energy
Logix Resourcing
Program/Project management, Software Development
MPower Plus
General professional – all sectors
HAVAS People
Education, Strategy, Communication
Gater Designs
Engineering
Spring Technology
IT – various
Allegis Global Solutions
Many industries including Aerospace, Biotech, Automotive, Oil & Gas
Alexander Mann Solutions
Many industries including Professional Services, Investment Banking, Retail Banking, Energy
Resource Solutions
Too many industries to list but this company is global
Resourcing Solutions
Rail, Power, Construction – E.g. surveying etc
The list above is very broad and will likely be a good match for the large variety skillsets of members of RVF. You will need to contact the agency you feel is most relevant for the industry you are in.
Subcontractor vs. employee.
There is a very clear definition of what makes on person a contractor and what makes a person an employee. A contractor will provide their owns tools whereas an employee has them all provided for them. An employee is entitled to benefits such as paid holiday and statutory sick pay. They also have work guaranteed and is a much safer form of working, they do get paid less for it though. Where as a contractor is expected to absorb the cost of holidays within the premium charged for their services.
For the accounting side many of you will operate as a limited company although some may chose to be a sole trader for your own reasons. Both have strengths and weaknesses as assessed below.
Limited company
Pros
-Protects personal assets ie director and business are separate
-Easier to do business ie more reputable
-Will actually save you from paying too much tax
-Director benefits include cheaper insurances
-Most tax efficient
-You can pay up to £40,000 a year to a company pension scheme which reduces corporation tax bill by £8,000.
-Tax losses can be carried forward indefinitely.
- Likely qualify as a "micro entity" meaning very limited company performance income is made public (balance sheet/statement of financial position only)
Cons
-Anyone can find out how much you make to a point
-Will cost more in accountancy fees
-Only benefits those with profits over £3k/mo
-Company will pay corporation tax currently at 20%
- The annual filing fee is £13
- You will need an accountant to submit your annual returns
- As a company director your personal address will be in the public domain
Sole Trader
Pros
-Your income is private to you and your accountant only
-Cheapest to set up
- You could submit your own annual returns potentially no accountancy fees
Cons
-You are liable for the companies debts
-Entire profits is regarded as personal income and could be taxed upto 45%
-There are no tax losses to carry forward after one year if you make a loss
I did a cost benefit analysis for one client who is a consultant in the IT industry who would have saved over £15,000 in tax that year by being a limited company. For privacy reasons she felt paying that premium was worth remaining a sole trader. I did not agree with her opinion. Most consultants would be better off being a limited company if your annual profits are £36,000 or more.
I would expect most to operate as a limited company and I would recommend that for almost everybody.
Should you register for VAT?
Yes you should, as your sales are business to business it costs you nothing to be vat registered. As your expenses will be very little very is a vat scheme called Flat-Rate Scheme (FRS) you can use where you pay a flat % of Gross sales over to HMRC, you can claim inputs for assets costing more than £2000. VAT returns must be submitted every 3 months. The FRS scheme is applicable to companies with a net turnover of £150,000 or less (£187,500 when grossed up). For consultants with income greater you will probably be cash accounting whereby you owe VAT when you receive money.
The % for various industries are as follows:
Accountancy or Bookkeeping 14.5%
Architect, civil and structural engineer/surveyor 14.5%
Computer and IT Consultant. Date processing14.5%
Financial Services 13.5%
Lawyer or legal services 14.5%
Management consultancy 14%
There are more rates found in the link below but these ones are the mains ones that will apply to most RVF members.
https://www.gov.uk/vat-flat-rate-scheme/...ch-you-pay
Income structure is as follows, Personal Allowance + Dividends. For the current tax year the personal allowance is £11,000 and dividend allowance is £5,000. Meaning you can draw £16,000 before you are liable for any income tax. Even then it would be at the dividend rate which starts at 7.5%
For example if you drew £40,000 only £26,000 would be taxable at a rate of 7.5% meaning you would only pay £1,950 in income tax, an effective tax rate of 4.9%. If you were a sole trader you would pay £5,720 in income tax, which is quite a large saving.
Important dates to remember
31st January for personal tax filing (electronic filing)
9 months after year-end for corporation tax filing
It would be advisable but not necessary to have your year end to be 31 March as roughly coincides with the income tax years.
Expenses
Other things to bear in mind as a consultant or subcontractor you can claim travel expense from your home to your place of work for up to 24 months. After that you will no longer be able to claim travel expenses. Travel expenses are most likely to be the bulk of your expenses so it is definitely worthwhile to ensure that your projects are less than 24 months long. Mileage is claimed at the following rates
First 10,000 miles are at 45p and every mile after is 25p. The mileage year runs from 6th April to 5Th April the following year.
Make sure that your mobile phone (even personal phones) are in the companies name and this includes your home broadband too as they can now be considered as a business expenses. An adjustment will be put through at the end of the year to ensure that the correct corporation tax is payable.
Your lunch is also now a business expense to a certain degree although if you were taking clients out that is non-deductible for corporation tax.
You may decide to purchase a vehicle but there are certain rules as to whether or not you can reclaim the VAT back. VAT is only reclaimable for commercial vehicles. As a general rule vehicle that does not have windows where the rear passengers would be sat, there must not be any seats there either are considered to be commercial vehicles. There are some ordinary road cars that are “vans” Such as the Ford Fiesta van. The idea is to stop people buying luxury cars as company cars. You could buy a car through your company but you wont be able to claim the vat back and you will have to pay a % of the list price based on vehicle emissions added to your salary as a benefit in kind and will increase your tax bill. You would be better off claiming the mileage instead of putting in actual motor expenses.
You can contribute up to £40,000 in to a company pension for yourself, which is a tax-deductible expense. As long as you have enough profits to do so.
For registering your limited company follow the instructions on the following link. If you do not want your private address to be the registered office you will need an accountant.
https://www.gov.uk/register-a-company-online
If you want to set up a limited company please feel free to PM me and if necessary I can act as your accountant as that is what I do. Also if there is anything else you would like to know again please feel free to drop me a PM.
My background is accountancy and I have prepared work for many different subcontractor/consultancy firms.
Why should you be a consultant?
There will come a point in your career when you have all the experience and knowledge you need but will want to increase your income. Consulting makes perfect sense, as you will be paid a premium over the company you’re contracted for employees.
Fuel Recruitment
IT, Consulting, Telecoms, Engineering, Marketing
Volt Europe
Engineering, IT, Life Sciences, Telecom, Data & Analytics
Computer People
IT – a very large variety, too many to list
Lorien
Engineering, Financial Services, Insurance, IT sales, IT services, Pharmaceuticals, Transport and a few others
Rullion
Too many to list but includes, Civil Engineering, Petro-chem, Legal, Mining, Finance
Perform IT
Ireland based IT
LA International
Defence, Engineering, IT, Finance
Ricardo
Environmental & Energy
Logix Resourcing
Program/Project management, Software Development
MPower Plus
General professional – all sectors
HAVAS People
Education, Strategy, Communication
Gater Designs
Engineering
Spring Technology
IT – various
Allegis Global Solutions
Many industries including Aerospace, Biotech, Automotive, Oil & Gas
Alexander Mann Solutions
Many industries including Professional Services, Investment Banking, Retail Banking, Energy
Resource Solutions
Too many industries to list but this company is global
Resourcing Solutions
Rail, Power, Construction – E.g. surveying etc
The list above is very broad and will likely be a good match for the large variety skillsets of members of RVF. You will need to contact the agency you feel is most relevant for the industry you are in.
Subcontractor vs. employee.
There is a very clear definition of what makes on person a contractor and what makes a person an employee. A contractor will provide their owns tools whereas an employee has them all provided for them. An employee is entitled to benefits such as paid holiday and statutory sick pay. They also have work guaranteed and is a much safer form of working, they do get paid less for it though. Where as a contractor is expected to absorb the cost of holidays within the premium charged for their services.
For the accounting side many of you will operate as a limited company although some may chose to be a sole trader for your own reasons. Both have strengths and weaknesses as assessed below.
Limited company
Pros
-Protects personal assets ie director and business are separate
-Easier to do business ie more reputable
-Will actually save you from paying too much tax
-Director benefits include cheaper insurances
-Most tax efficient
-You can pay up to £40,000 a year to a company pension scheme which reduces corporation tax bill by £8,000.
-Tax losses can be carried forward indefinitely.
- Likely qualify as a "micro entity" meaning very limited company performance income is made public (balance sheet/statement of financial position only)
Cons
-Anyone can find out how much you make to a point
-Will cost more in accountancy fees
-Only benefits those with profits over £3k/mo
-Company will pay corporation tax currently at 20%
- The annual filing fee is £13
- You will need an accountant to submit your annual returns
- As a company director your personal address will be in the public domain
Sole Trader
Pros
-Your income is private to you and your accountant only
-Cheapest to set up
- You could submit your own annual returns potentially no accountancy fees
Cons
-You are liable for the companies debts
-Entire profits is regarded as personal income and could be taxed upto 45%
-There are no tax losses to carry forward after one year if you make a loss
I did a cost benefit analysis for one client who is a consultant in the IT industry who would have saved over £15,000 in tax that year by being a limited company. For privacy reasons she felt paying that premium was worth remaining a sole trader. I did not agree with her opinion. Most consultants would be better off being a limited company if your annual profits are £36,000 or more.
I would expect most to operate as a limited company and I would recommend that for almost everybody.
Should you register for VAT?
Yes you should, as your sales are business to business it costs you nothing to be vat registered. As your expenses will be very little very is a vat scheme called Flat-Rate Scheme (FRS) you can use where you pay a flat % of Gross sales over to HMRC, you can claim inputs for assets costing more than £2000. VAT returns must be submitted every 3 months. The FRS scheme is applicable to companies with a net turnover of £150,000 or less (£187,500 when grossed up). For consultants with income greater you will probably be cash accounting whereby you owe VAT when you receive money.
The % for various industries are as follows:
Accountancy or Bookkeeping 14.5%
Architect, civil and structural engineer/surveyor 14.5%
Computer and IT Consultant. Date processing14.5%
Financial Services 13.5%
Lawyer or legal services 14.5%
Management consultancy 14%
There are more rates found in the link below but these ones are the mains ones that will apply to most RVF members.
https://www.gov.uk/vat-flat-rate-scheme/...ch-you-pay
Income structure is as follows, Personal Allowance + Dividends. For the current tax year the personal allowance is £11,000 and dividend allowance is £5,000. Meaning you can draw £16,000 before you are liable for any income tax. Even then it would be at the dividend rate which starts at 7.5%
For example if you drew £40,000 only £26,000 would be taxable at a rate of 7.5% meaning you would only pay £1,950 in income tax, an effective tax rate of 4.9%. If you were a sole trader you would pay £5,720 in income tax, which is quite a large saving.
Important dates to remember
31st January for personal tax filing (electronic filing)
9 months after year-end for corporation tax filing
It would be advisable but not necessary to have your year end to be 31 March as roughly coincides with the income tax years.
Expenses
Other things to bear in mind as a consultant or subcontractor you can claim travel expense from your home to your place of work for up to 24 months. After that you will no longer be able to claim travel expenses. Travel expenses are most likely to be the bulk of your expenses so it is definitely worthwhile to ensure that your projects are less than 24 months long. Mileage is claimed at the following rates
First 10,000 miles are at 45p and every mile after is 25p. The mileage year runs from 6th April to 5Th April the following year.
Make sure that your mobile phone (even personal phones) are in the companies name and this includes your home broadband too as they can now be considered as a business expenses. An adjustment will be put through at the end of the year to ensure that the correct corporation tax is payable.
Your lunch is also now a business expense to a certain degree although if you were taking clients out that is non-deductible for corporation tax.
You may decide to purchase a vehicle but there are certain rules as to whether or not you can reclaim the VAT back. VAT is only reclaimable for commercial vehicles. As a general rule vehicle that does not have windows where the rear passengers would be sat, there must not be any seats there either are considered to be commercial vehicles. There are some ordinary road cars that are “vans” Such as the Ford Fiesta van. The idea is to stop people buying luxury cars as company cars. You could buy a car through your company but you wont be able to claim the vat back and you will have to pay a % of the list price based on vehicle emissions added to your salary as a benefit in kind and will increase your tax bill. You would be better off claiming the mileage instead of putting in actual motor expenses.
You can contribute up to £40,000 in to a company pension for yourself, which is a tax-deductible expense. As long as you have enough profits to do so.
For registering your limited company follow the instructions on the following link. If you do not want your private address to be the registered office you will need an accountant.
https://www.gov.uk/register-a-company-online
If you want to set up a limited company please feel free to PM me and if necessary I can act as your accountant as that is what I do. Also if there is anything else you would like to know again please feel free to drop me a PM.