As a contractor you understand the importance of finding the optimum solution for your clients, so why should you feel any differently about how you manage your own income? An umbrella company works well for many contractors, but do you understand the alternatives?
Working through their own limited company gives many contractors the opportunity to minimise their tax liability, maximise their income and shape the direction of their business and their career. With the support of Freelance World many have found that running their business is a lot less difficult or time consuming than they'd thought.
A LIMITED COMPANY MAY BE FOR YOU IF:
- You plan to be a long term contractor
- You like the idea of controlling your business
- Your contract and working practises place you outside the scope of IR35
AN UMBRELLA COMPANY MAY BE FOR YOU IF:
- You are new to contracting or on a short term assignment
- You do not want to be, or are unable to fulfill the legal requirements of being a Company Director
- You are looking for a low cost, low commitment way to manage your income
Freelance World take time to understand your personal and professional aspirations, ensure you understand the risks, responsibilities and rewards associated with each trading method, and provide you with support to run your business effectively and compliantly, whether you choose to work through a limited company, or through our umbrella company.
UMBRELLA COMPANY VS. LTD COMPANY, WHICH IS BEST FOR ME?
Let's look at the pros and cons of working through an Umbrella company vs. a Limited Company option.
UMBRELLA COMPANY ADVANTAGES
- The ability to offset certain business expenses
- The rewards of contracting without the responsibility of running your own company
- Easy to use - You need do nothing more complicated than fill in a timesheet and expenses claim form
- Your tax will be deducted at source so you can be sure that you have paid the correct amount of tax and NI
- No set up or close down fees and your Umbrella Company will fill in the official paperwork for you
- You completely avoid the IR35 tests and are paid under a PAYE structure
- An Umbrella Company will carry professional indemnity, public liability and employers insurance for you
- Well suited for short-term or low value assignments
UMBRELLA COMPANY DISADVANTAGES
- The contractor will by definition not be running the company and will therefore be using it simply as a service to process transactions
- You are reliant on the umbrella company to collect your money from the client or agent and then to pay it on to you
LIMITED COMPANY ADVANTAGES
- The ability to offset certain business expenses
- As a director of your own company you might experience an increased business status
- Complete control of the company and its transactions. Simple to administer and operate
- Low salary plus the ability to distribute dividends to shareholders. Dividends taken attract a lower effective rate of tax and/or NI
- Great for people who are looking at contracting as a career and who may want to use their company for other business activities.
- Highly tax efficient way of operating provided that your income is not caught by IR35
- Some firms cover clients under their schemes for professional indemnity, public liability and employers insurance
- Well suited to a professional career as a contractor
LIMITED COMPANY DISADVANTAGES
- There are set up and close down costs and a minimum of twelve months commitment to the company
- Time spent on admin. Accounts need to be kept on a weekly, monthly, annual basis. All detailed records for a minimum period of seven full tax years
If the freedom and flexibility of a Freelance World solution appeals to you, why not call a member of our new business team on 01224 585 599 or email them on enquiries@freelanceworld.net.
They will take you through our free DNA (Desires and Needs Assessment) process, a fact finding exercise to ensure you have the right information in front of you to make the right decisions to suit your lifestyle needs.
If you have any queries you would like to chat over with someone live over the internet please use our livechat link
- new customer - 01224 585 599
- referrals
Find out why working through your own limited company can minimise your tax and maximise your income with Freelance World.
Be sure you have the right information at your disposal to ensure you understand how to run your own business efficiently.
At Freelance World, compliance underpins everything we do across all aspects of our business.
- A range of flexible solutions to fit all sizes and shapes
- Set-up process that’s one of the fastest in the industry
- Guaranteed turnaround and response times or your money back
- IR35 and tax advice
An umbrella solution is a risk free solution that can have you trading in a matter of hours.
Enjoy all the benefits of being an employee with none of the burden of running your own business!
An umbrella company works well for many contractors, but do you understand the alternatives?
- Dedicated account manager
- CIS registered
- International capability
Working overseas means you need to understand your tax obligations in the country you are working in as well as in the UK.
A Freelance World international solution means working overseas needn't be taxing!
As an employee of our Norwegian umbrella company you can have total peace of mind that all your UK and Norwegian tax is being deducted and paid on time every time.
- Payroll payments to any bank in any currency
- Global insurance cover
- In-country Banking, Taxation and Contractual advice
- Fast and efficient set up
What is CIS and how does it affect the construction industry?
Remove the administrative hassle of CIS with a Freelance World solution.
Get paid on time, every time, guaranteed with our CIS solution
- Automatic deduction of CIS taxes due
- Competitive insurance to protect your business and personal affairs
- Discounted Self Assessment tax returns
- Dedicated Account Manager
