Insights / For Fraci
How do I set up my own entity, bank account and everything else that goes with NOT being an employee?
Nobody hands you a starter pack when you leave the payroll. If you want to control your own destiny, here's a guide to starting that journey.
You've spent years helping owners structure and optimise their businesses. Now it's your turn, and it all feels a little bit heavier when you're the only person carrying that load — but it's completely manageable. Most finance professionals going fractional set up in a hurry because the first client wants an invoice by Friday. We've put together some useful pointers below, to give you an indication of cost and effort.
First question: do you even need a company?
There are three realistic routes. None is right for everyone, and the choice depends more on your clients than on you.
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| Route | How it works | Suits you if |
|---|---|---|
| Sole trader | You invoice personally and pay income tax and Class 4 NICs through self assessment | You are testing the water, with one client and modest income |
| Limited company (PSC) | You own and direct a company that contracts with clients and pays you salary and dividends | You plan to do this for more than a year, with several clients or higher fees |
| Umbrella company | An umbrella employs you and runs PAYE on your fees, minus its margin | The client or agency insists, or the role is caught by IR35 |
In practice, most senior fractional f