Umbrella Company & Limited Companies
As a professional contractor, you need to ensure that you are making the most of your earnings and one of the best ways of achieving this is to be absolutely certain that you are not paying more tax than you have to.
You are able to do this through an Umbrella Company or Limited Company by providing you with the structure that will invoice us (the recruitment agency) on your behalf, while allowing you to increase your take-home pay by offsetting business related expenses against your gross income so as to reduce your taxable income.
Most importantly you get the structure to maximise your net earnings whilst working within IR35 guidelines.
With an Umbrella Company:
- You become an employee of that company.
- You are provided with full employment rights.
- You are covered by the company’s insurance policies for Employer and Public Liability Insurance as well as Professional Indemnity Insurance.
- You are expected to remain as an employee of the company and work on successive assignments.
- You are entitled to claim business-related expenses to offset your tax liabilities (subject to the company’s Expense Policy).
- You may also be entitled to enhanced expense claims if you are not a UK national and just arrived in the country to take up your job (Please contact us to check your entitlement).
- The company takes full responsibility for PAYE, National Insurance and VAT payments together with all the statutory reporting.
With your own Limited Company:
- A company is incorporated to your own specification.
- You are the director, shareholder and employee of your company.
- You determine your salary and what dividends to draw on.
- You are entitled to claim business-related expenses to reduce your tax liabilities.
- Run your payroll and get sent your pay slips.
- Work alongside an accountancy firm to advise you what taxes are payable and when they need to be paid by.
We are able to engage someone on a self employed basis, which means that you will be responsible for preparing your own invoice for the practice and they will pay you directly for any work carried out.
Of course this means you will have to sort your own Tax and National Insurance contributions.
Please be aware if deciding on this payment method, that not every practice is happy to engage a worker on a self employed basis as there are several potential implications for them. So there is a possibility that you will limit the number of practices we could offer you work with.
Also as you would be responsible for preparing your own invoices, this means you are responsible for chasing your own payments – should a practice not pay the invoice for any reason, unfortunately we are unable to assist in any way with this.