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Umbrella vs Limited

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Umbrella vs Limited

Umbrella vs Limited

Whether to operate through a limited company or an umbrella company is one of the most important decisions a contractor must make.

Two main factors to think about when making this decision are Time and Money.

Money – In short operating through a limited company will return the highest take home pay percentage. Using an experienced contractor accountant’s tax planning you will be able to save both National insurance and PAYE by operating through a limited company. If operating through umbrella companies you are effectively paid like an employee of the umbrella company and will be paid a salary after both NI and PAYE have been deducted (although you will be able to offset some expenses incurred).

Time – Operating through an umbrella company results in little or no paperwork and you will have no company accounts to keep in order! With becoming the director of a limited company comes legal obligations and responsibilities (increased workload). It is your responsibility to ensure both the company’s and your personal tax affairs are in order, this involves submission of company accounts, VAT returns and personal self-assessment return. Appointing an accountant can help reduce the workload significantly.

Although these are the two main factors, there are also other factors to consider when making your decision such as; Length of your contract, IR35 status, Job security and benefits.

We strongly recommend that you seek professional advice to help with your decision whether to operate through a limited company or umbrella company. Ensuring you have made the right decision could help you make significant savings.

Who to speak to?

Thinking of starting up contracting?

Already operating through an umbrella company?

If you are interested in hearing what way is best for you or how to switch to limited please do not hesitate to contact us.

0161 669 4221

Info@biaccountancy.com

To book in a FREE consultation, contact us today on 0161 669 4221 or info@biaccountancy.com.

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