The latest IT Contractor News from Contract Eye

A leading contractor accountancy firm has reported a sharp increase in the number of limited company formations this year, suggesting that a change is taking place to the UK's traditional working model.

SJD Accountancy says it has seen a 65% increase in the number of new contractors and limited company formations so far this year, compared to 2009.

It would appear that many more people are both choosing, and being forced due to economic conditions to set up a limited company and work for themselves. The alternative is finding a job in an increasingly difficult jobs market.

With so many cuts to the benefits of so called 'jobs for life' such as the end of final salary pension schemes, the loss of golden handshakes (many people are lucky to get anything more than statuary redundancy), downsizing and pay freezes, SJD says that it's not surprising that so many people are choosing to take matters into their own hands and go it alone.

The surge in limited company formations follows the implementation of various government initiatives to simplify the process of setting up a business, such as being able to form a limited company within three hours (actual time inputting the details is just 5 minutes), opening a business bank account in a week, and VAT registration in 2-3 weeks which used to take up to 8.

Unsurprisingly, the firm says that tax issues, although still complex, are easily manageable with the help of a good accountant!