Umbrella to a Limited Company
Switching from an umbrella to a limited company
Changes to the way contractors can claim tax relief on travel and subsistence expenses are on the way. And these changes could mean you paying more in tax.
If you’re currently trading through an umbrella company, then now’s the time to look at moving to become a limited company, with all the tax efficiencies this offers.
From April 2016, the tax relief on home-to-work travel won’t be available to umbrella companies – and that means you paying more in tax which lowers your take home pay.
The new legislation only affects workers under the direct control, supervision and direction of their end-client, or those working inside IR35. By becoming a limited company, whilst operating outside of IR35 and the direct control of an employer, you can still claim these travel and subsistence costs through the company.