Corporate partnership
Corporate partnerships (otherwise known as LLPs) operate in a very similar way to limited companies. They have a formal set up and legal independence, and you’ll be taxed individually by completing a self assessment tax return (which we would, of course, help you with). This sort of set up is often popular with accountants and lawyers as it does have a few extra benefits compared to limited companies, and allows a bit more freedom in various ways. The problem for contractors is that recruitment agencies have a concern over employment risk (as with self employment) so it can be hard to get contracts through an agency when you run a corporate partnership.
Good choice if:
- You work with others and want flexibility
- You’re a freelancer working on multiple short projects, alone or with your partner
- You’ve decided to commit to contracting for the long term
- You’re happy to take on the extra responsibility
- You have a specialist contractor accountant, like ClearSky on your side to take over the majority of paperwork and hassle
- You don’t mind budgeting for your tax bill, which may be paid in one lump sum
- You’re happy to manage your own finances
Not so good if:
- You work alone and have no partners
- You plan to get some or all of your contracts through a recruitment agency
- You don’t want any hassle or responsibility at all
- You can’t get your head around the basic principles of tax, IR35, National Insurance contributions and so on
- You want to pay tax as you earn (PAYE), instead of being landed with one big tax bill
- You earn below £35,000 a year
