First time contractor?
If you are considering a change from permanent employment to a contract position, then there are two options available to you.
- Set up and work through your own Limited Company.
- Work through an Umbrella company.
Contracting through your own Limited Company
There is a popular misconception that contracting through your own Limited Company is complicated and time consuming. Nothing could be further from the truth.
Running your own Limited Company with the support of a Chartered Certified Accountant is simple, efficient and much cheaper than you think.
It will require a bit more work than using a PAYE Umbrella, but the benefits can be considerable.
Advantages
- The most tax efficient method
- You are entitled to claim a wide range of legitimate business expenses
- You will be able to take advantage of the Flat Rate VAT scheme
- You retain full control of your finances without the need to deal with a third party processing company
Contracting through a PAYE Umbrella
Here you are essentially an employee of the Umbrella company. You enter a contract with the umbrella company and your client or agency will set up a contract with the umbrella company for your services.
Advantages
- Simple to use, just submit your timesheet and expenses and wait for your pay
- Any tax and NI is deducted before you are paid, so there will be no further taxes to pay
- Suitable for those contractors who are uncertain whether they will be contracting for more than 12 months
If you would like further advice on umbrella services or setting up a Limited Company please call Kerry Pickersgill on 0161 968 8100 or email
Client introductions: we offer £75 for a new Limited Company and £50 for a new Umbrella
Reilly McMordie specialise in providing accountancy services for contractors throughout the UK. Established in 1985, we have extensive experience in the industry.
Next Step:
Please contact us if you need further advice, have any questions about our services, would like a free consultation or a fixed fee quote.
