For locum + consultant solicitors
Locum and consultant solicitors hit a structure decision early in self-employment and live with it for years. Limited company, umbrella, or sole trader. There is no universal right answer — it depends on income, engagement mix, IR35 determinations, and what you want from PII and pension.
The questions and concerns that come up most often in a first conversation.
Below roughly £80,000-£100,000 of sustained consulting income, the admin cost of running a limited company rarely beats sole-trader status. Above that, it depends on how many engagements sit outside IR35 and your need for tax-planning flexibility (non-working spouse, deferred income, retained earnings for reinvestment).
Since 6 April 2021, when the engaging firm is a medium or large client, the firm (not your PSC) determines IR35 status. If they issue an inside-IR35 SDS, PAYE-style deductions apply on your fees despite the Ltd-co structure. Net into your company; cannot extract as dividend tax-efficiently.
Sole-trader and Ltd-co consultants typically need their own PII to the SRA Minimum Terms and Conditions. £2m minimum cover. Annual renewals around October. Premiums for solo consultants are generally £1,500-£4,000+ depending on practice area and claims history. Litigation-heavy consultants pay materially more.
Outside IR35: SRA practising certificate, PII, professional subscriptions, CPD, motor between engaging firms, accountancy fees, professional indemnity excess, office equipment under AIA. Inside IR35: very limited; restricted to the same items an employee can claim. The engagement structure determines what's claimable.
Umbrella employs you under contract of employment, runs PAYE on your earnings, deducts tax and NI, pays you net. Expenses very restricted. Convenient and low-admin but rarely the most tax-efficient option for sustained consulting income. Suits short-term work and low-volume locuming.
Different firms may issue different IR35 determinations for similar work. Travel between firms is deductible (not home-to-first-firm). Apportioning materials, motor and overhead by engagement matters for accurate tax. We map each engagement against the right structure.
We model your specific income mix against all three structures: take-home after tax + NI, administrative cost, PII availability, IR35 implications. Output is a one-page comparison with a recommended structure and reasoning.
All consulting income, expense claims, professional subscriptions, payment-on-account schedule, student loan plan if applicable. Filed inside the deadline. Receipts tracked via a shared bookkeeping system so you're not chasing them in January.
Annual statutory accounts, corporation tax return, personal director self-assessment, PSC payroll for the salary leg, dividend administration, IR35 status tracking per engagement. We handle each component or just the parts you need.
When a firm issues a Status Determination Statement, we review whether it's correctly issued. Most are; some are not. Where the determination is challengeable we support the appeal. Where it stands, we restructure the income flow to reflect the deduction.
Lenders want SA302s with consistent income for sole-trader consultants or 2 years of company accounts for Ltd-co consultants. We produce both inside 48 hours of request and work with the legal-sector-friendly mortgage advisers who lend on professional income.
Free 10-minute practice health check
30-minute scoping call. We run the Ltd vs umbrella vs sole-trader comparison on your specific income and engagement mix and tell you which one wins on real numbers.
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