Limited Company VS Umbrella Payroll Company
Contractor PAYE Alternatives
In the modern day workplace, an increasing number of skilled people are choosing
to become independent contractors. This decision not only allows
for a more free and independent lifestyle, it also increases earning capacity,
with income directly linked to work output and some very favourable tax structures
for contractors.
Is a Limited Company the way to go?
One of the decisions facing independent contractors is whether to set up a Limited
Company or work through an Umbrella Payroll Company. Both have distinct
advantages and either option can work well.
Scott Brown from 1st Contact Accounting believes that those who fall outside of
IR35 will benefit most from setting up a
Limited Company:
“People are put off by the monthly and annual paperwork a Limited Company requires.
But what they don’t realise is that going through a professional accounting firm
is cost-effective and makes the process much easier!”
There are many tax benefits to setting up and running a Limited Company.
You can, for instance, claim back on a wider range of expenses, including accountancy
fees, travel costs and the equipment needed to run your business. Because Corporation
Tax rates are so much lower than paying PAYE and NI, you get the benefit of the company
tax structures as well.
Another advantage is the ability to register for the flat rate VAT scheme,
which allows you keep some of the VAT you receive from your clients. You also have
complete control over your finances.
“Be sure to partner with a reliable, and preferably ICAEW registered, accounting firm from the onset, as this is the
only way to ensure your accounting and tax matters are always under control.”
says Brown.
1st Contact Accounting provides accounting services specifically for contractors
and can assist you with the hassle-free setting up of your Limited Company in just 24 hours!
The other option of course is to investigate working through an Umbrella Company like 1st
Contact Umbrella. This is often the easiest option for first time contractors
and for those who might go back to permanent employment after a brief contracting
period.
Whichever option you decide is best for you, it’s always a good idea to get as much
advice as possible before going on your own. While this lifestyle offers many rewards,
it’s not easy to begin with if you don't have the right support available.
If you are on or looking to secure a short, medium or long term contract and would like to explore the advantages of becoming independent contractor,
contact us today for more information or to
find out about a free consultation.
Complementary Limited Company Services
For more information, or to get started
right away, contact 1st Contact
now.