Uncertainty related to Tier-1 visa,its effect on contracting

[gt11]

Does anyone know whether Tier-1 visa holders are allowed to do contracting? I am a newbie. Is it advisable for me to do contracting, given the complexity of the formalities involved? What would be more advisable for me to do if I am to go for contracting: form my own company, or to go with an umbrella company?

One uncertainty of being on Tier-1 visa is that there’s no guarantee that I’ll be successful in getting my visa extension (I got around 1.5 years left before I’ll need to apply for extension). In case of company formation, I’ve heard that it is a statutory obligation to retain company accounts for a number of years (is it six?). Can you confirm this? If that is the case, then given the fact that there’s no guarantee I’ll be allowed to stay in UK for 6 years so how would I retain the company for 6 years (or whatever the number of years obligation is)?

I would request everybody’s opinion, and especially helpful would be practical experiences.

Thank you very much.

[nswapnil]

I came to UK on HSMP and did 2 extensions now, I am doing contracting from day 1 (under my limited company) and had no problems in extending my visa. Appoint a good accountant and life will be easy.

[nfoote]

One uncertainty of being on Tier-1 visa is that there’s no guarantee that I’ll be successful in getting my visa extension (I got around 1.5 years left before I’ll need to apply for extension). In case of company formation, I’ve heard that it is a statutory obligation to retain company accounts for a number of years (is it six?). Can you confirm this? If that is the case, then given the fact that there’s no guarantee I’ll be allowed to stay in UK for 6 years so how would I retain the company for 6 years (or whatever the number of years obligation is)?

A combination of an accountant and some of the good online software like FreeAgent will take care of this.

Myself and plenty of other people on here contract through limited companies. In terms of getting an extension to your visa its fairly simply as you'll still be a salaried employee of your company with other income from dividends from your shares, you are NOT self-employed.

Go the limited company, little bit of work to set up, but accountant should let you know everything you need to do. Once its done its even a little bit fun entering your details in things like FreeAgent and of course the higher take home pay helps too

[gt11]

Thanks to both of you. Can you or anone please tell me, how much does that good accountant charge for this service that you're talking about?

Another thing..
My other question in other words was.. suppose I start my limited company, but I don't manage to earn adequately, to be able to score good points for the extension of visa that I will require in future.. then, I would not get extension and I would have to leave UK.. then, I'd have to close the company, then (here starts my question).. would it not be a problem in closing the company, given the fact that "it is a statutory obligation to retain company accounts for a number of years"?

Thank you again!

[hussainkothari]

Can you or anone please tell me, how much does that good accountant charge for this service that you're talking about?

I guess I pay towards the higher end. 115£ pm (inc VAT)

My other question in other words was.. suppose I start my limited company, but I don't manage to earn adequately, to be able to score good points for the extension of visa that I will require in future.. then, I would not get extension and I would have to leave UK.. then, I'd have to close the company, then (here starts my question).. would it not be a problem in closing the company, given the fact that "it is a statutory obligation to retain company accounts for a number of years"?

You can close down the company anytime you want. The benefit of closing down a company after a year (of opening it up) is to pay a little less tax. You can close your company anytime of the year. There is no such obligations to keep it open. Of course you would have to file your accounts and year ending stuff with HMRC when ever you chose to close it.

[gt11]

Thank you very much for your informative reply. So, to confirm, the accountant's services for accounting as well as for assistance in company formation is included in the 115 pm ?

Also how much time does the whole process of company formation take? I am trying for contract jobs, and I am also telling recruiters that I am immediately available for such jobs.. But I've started feeling that its incorrect to say that I am immediately available (isn't it?), given the fact that to start working on a contract job i would first need to form a company, and this would take some time. So, if I start forming a company after getting selected for a contract job, then I won't be immediately able to join that job. Is that right? [FYI, I can't form a company in advance because I am not in UK these days but in my home country.. and I plan to immediately move to UK once I land a job through telephonic interviews (some interviews are in the pipe)].

[nfoote]

Thank you very much for your informative reply. So, to confirm, the accountant's services for accounting as well as for assistance in company formation is included in the 115 pm ?

Also how much time does the whole process of company formation take? I am trying for contract jobs, and I am also telling recruiters that I am immediately available for such jobs.. But I've started feeling that its incorrect to say that I am immediately available (isn't it?), given the fact that to start working on a contract job i would first need to form a company, and this would take some time. So, if I start forming a company after getting selected for a contract job, then I won't be immediately able to join that job. Is that right? [FYI, I can't form a company in advance because I am not in UK these days but in my home country.. and I plan to immediately move to UK once I land a job through telephonic interviews (some interviews are in the pipe)].

Kind of getting off topic of this forum, but anyway ...

I pay about £120pm which again is at the high end but my accoutant has always answered my many newbie questions very quickly, often ringing me personally to explain things when email wouldn't be clear enough. So pretty happy.

Terms of company formation, I think this normally costs £100 as a one off fee but my accountancy had a promotion going where they paid for it when I signed up so not too sure. Forming the company is quick and easy (when your accountant does it at least), all you need to do is pick a name! Thats probably all you need to get the contract signed, a company set up through your accountant. Once you've started working you will need go to a bank and open a business account, otherwise your clients won't be able to pay you when you invoice at the end of the first month!

Check out the follow link for Contractor UK forums, lots of helpful advice on this topic (unrelated to visas or immigration tho). Do use the search functions to look for answers first tho, they do get titchy about repeated questions every day

http://forums.contractoruk.com/