Subcontractor or start a company?

Question

Hi, I am leaving my company in six weeks to study. Whilst at the company, I have picked up several skills that I think can and will support me+my wife financially through the year at uni.

We have already started a company (not trading yet). My question is should we start trading my services through my company or dissolve the company and offer my services via sub contractual agreements instead?

PS the company is registered as a sole trader and I have recently discovered that if i sub contract, all i have to do is keep all receipts and fill tax form annually. For a company its more complicated right? Wrong? I don't know.

What are the pros and cons of both options?

any and all advice is highly appreciated

Answer 1

You state that you have started a company and then you say you are a sole trader - these statements are contradictory.

If you have registered a company, you are not a sole trader - the company is the legal entity and you presumably are a director. Whether you trade through a company or as a sole trader, you still need to maintina proper books of account. As you seem confused, I think half an hour's free time with an accountant would be your best option.

Answer 2

dear friend,

if you want to start as sub contractor than first you have to decide that how would you get your customer, i would like to tell you that most of the people trust on the company. You are worried about filing income tax return.......isnt it ? but my dear friend in both the options you will have to file income tax return becouse you are working as contractor whether as company or without company, your client will deduct TDS if they are not individuals, so in order to get back the TDS amount you will have to file the tax return so that you can get the refund.

My advice is this that you must consult an experiece chartered Accountant.

I am doing CA final so you can get only limited help from me.

bye