Many contractors find that having their own limited company is the best way for them to run their businesses. But in the UK, one worker out of seven is self-employed, and a vast number of these operate as sole traders, limited liability partnerships, and full partnerships. The London-based Professional Contractors Group has decided to address the needs of these contractors with a specialised Web site and dedicated products.
Cost is one good reason not to go the limited company route. Administrative complexity is another, although running a limited liability partnership is probably just as challenging as managing an ltd. But a healthy percentage of UK contractors undoubtedly fit into the self-employed, and partnership moulds. Being self-employed just involves notifying the Revenue that you're doing it; a partnership is just two self-employed people who share accounts, and it has no legal status with the accompanying administrative hassles.
According to a PCG spokesperson, 94% of PCG members operate their own limited companies; however, only 70% find that this is the model they would most prefer to use. 20% of PCG members would prefer to be sole traders if they were left to their own devices, although only 3% of PCG members actually are working in this status. Sole trader would be the preferred model for 20% rather than the actual 3%.
20 per cent of PCG members would prefer to be sole traders if they could choose a status
PCG Spokesperson
Clearly being a sole trader is simpler and easier than being a limited company, although one loses a number of tax advantages. A partnership is an easy way to limit risk in a business since you share it all with some one else--profits too, of course. And a limited liability company, although it involves rather labour-intensive reporting requirements for the Revenue and to Company House, does provide you with a very limited exposure to financial risk.
For those who make these choices, the PCG has launched PCG Solo membership, tailored specifically to help sole traders, partnerships and limited liability partnerships. PCG Solo has been designed to offer them a comprehensive business package solution.
The latest Solo initiative is one more choice for the small business person and is designed to take the hassle out of running a business so that a freelancer can focus on their core business skills.
A Complete Portfolio
Announcing the initiative, David Ramsden, chairman of PCG said: ''We have designed PCG Solo to give freelancers more choice about how they run their businesses. Our business packages are designed to give freelancers the opportunity to source everything they need to set up in business with the help of PCG’s experts who understand their needs. PCG Solo completes our portfolio of business solutions.''
PCG Solo will provide members with:
- Professional Expenses Insurance (PEI) via PCG’s policy, which covers all members and pays up to £75,000 per claim to cover professional fees relating to any tax investigation including those on IR35, S660A, PAYE, VAT and other matters
- Jury service cover which pays up to £300 per day for 10 days if called
- Free access to tax and legal helplines
- Draft contract templates that enable a member to take on assignments using proper business terms
- Access to a wealth of technical and commercial advice via the forums
- Guidance on regulations
We have designed PCG Solo to give freelancers more choice about how they run their businesses
David Ramsden-PCG Chairman
PCG One-Stop for Limited Companies
Earlier this year PCG launched PCG OneStop, making it easier for freelancers and contractors to set up and administer a limited company.