Contracting for the first time?

Considering contracting for the first time? Find out the differences between a limited company and Umbrella employment structure.

Affected by IR35 changes?

If you need to switch to Umbrella, or wish to toggle between Umbrella and PSC, we can help.

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New to contracting and not sure where to start?

Contracting for the first time can be an exciting new career path, if a little daunting. It can open up new opportunities, income streams and will help broaden your experience and expertise within your sector.

Unlike permanent employment, contracting can provide you the flexibility of choosing the path you want to take easily and quickly. However, we would recommend you need to take some time to consider your options and ensure you are set up with HMRC compliantly.

Advice for new contractors

Contracting made simple

TAKE-HOME PAY CALCULATOR

Find out how your take-home pay compares between a imited company contract and Umbrella structure

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How we calculate these figures

Our take-home pay calculator does make a number of assumptions in the background in order to calculate the figures.

The limited company calculator assumptions:

Tax rates are based upon 2019/2020 and assumes no other personal income and that your company is incorporated and operated within the UK.
An individual’s personal allowance is £12,500 for the year (2019/2020).
All profits after tax are withdraw from the company as dividends.
Flat rate scheme is applied to the company turnover figure at a rate of 16.5% with a first-year discount of 1% applied.
Expenses are inclusive of VAT.
The income is not subject to IR35 and the contract is outside.
Director’s salary is assumed at £8,632 per year
Limited company accountancy fees are already assumed within the calculation and based upon the Express service package at £120+VAT
Employment allowance is not applied.

What are your options when contracting

Limited Company

Setting up a limited company will make you a director and shareholder of the company. It requires you to submit various documents to Companies House and HMRC each year, whilst ensuring you are set up with a business bank account and that basic record keeping is undertaken.

Typically, you pay yourself via a combination of salary, dividends and expenses but must ensure you only take what is available from the company. Whatever you do take, you may be taxed personally on it.

However, running a limited company can be rewarding as it gives you complete freedom to chose your contracts, the times you want to work and in most circumstances, provides the highest take-home pay.

A limited company is not always beneficial as it will depend on factors such as; length of contract, your rate of pay, the industry and whether IR35 is a factor.

Click here for our limited company services

Umbrella Solutions

Setting up and working through an Umbrella company is by far the simplest option if you want to get paid quickly or if a limited company is not an option.

You will need to register with an Umbrella company and once set up, you will be an employee of the company.

As your employer, the Umbrella company will handle all tax and National Insurance deductions and ensure you operate compliantly. You do not need to worry about IR35, nor have to think about setting up a business bank account.

As an employee of the Umbrella company, you’ll have full employment rights and numerous employee benefits, and as all of your income is paid on a Pay As You Earn (“PAYE”) basis, there’s no further requirement for you to submit tax returns, assuming you have no other sources of income.

Though employment through an Umbrella company may not be as tax efficient as working through your own limited company (circumstances depending), Umbrella employment can be the most suitable solution if you’re looking for as little administration and responsibility as possible, as it allows you to enjoy the flexibility of contracting and potentially undertaking various roles, all under one continuous employment and without having to run your own company.

Click here for our Umbrella solutions

Call us on 01923 257 257