In theory yes any contractor could set up a limited company (unless you are disqualified from being a company director for example due to bankruptcy).
With recent changes to the rules on claiming expenses for travel and subsistence there has been a lot of talk about contractors going ltd.
It is an option but the financial benefits only really start once you are earning at least £12 per hour and the potential benefits increase as earning increases.
As an individual setting up as a PSC you will need to consider IR35 for each of your contracts.
As a Ltd contractor operating inside IR35 you will essentially be paid as PAYE and will only benefit from the flat rate VAT scheme meaning you can make a small amount from VAT. This is approximately £1k/year.
If you fall outside of the IR35 test, then you will be entitled to claim all expenses. This makes a PSC the most financially attractive option for many individual contractors.
If you think this might apply to you then our sister company Exchequer Accountancy can help. They offer a range of services for contractors and can help with everything from the initial stages of setting up your ltd company to helping you run your company in the most tax efficient way possible.
