The Freelancer Limited Company
A proposal to introduce a special new type of limited company called a “Freelancer Limited Company” has been submitted to the Chancellor of Exchequer by The Association of Independent Professionals and Self-Employed the IPSE (formerly PCG – Professional Contractors Group)
A Freelancer Limited Company would be a similar new introduction to the previous new type of limited company called a Limited Liability Partnership (LLP) but would recognise that the company while still offering limited liability protection to the owner would be run by one person rather than 2 or more partners.
On the face of it this could be a sensible approach.
This vehicle could then potentially be outside the scope of IR35 and recognise a different set of tax rules to ensure the freelancer pays an appropriate level of tax while still gaining from tax benefits to reflect the entrepreneurial spirit of freelancers and that they are operating through their own limited company and taxable deductions in respect of business expenses incurred.
Considerations could be what if the business grows and the freelancer wishes to take on additional partners/staff? Would it then be necessary to then transfer the business to an LLP or Ltd? Can the business be sold? Etc
Umbrella currently support Freelancers though our Freelancer Umbrella Company and also as Freelancer Accountants for those operating through their own limited company.
Please feel free to call us for further details or advice on 0800 121 6513.