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PAYE UMBRELLA

The simplest way for a contractor to get paid is to work for an umbrella firm. An umbrella company’s registration process is simple and quick, and once you register, the business hires you on the spot. You won’t need to open your own firm or perform any other administrative duties besides turning in timesheets if you use this payroll solution.

You will be responsible for paying all of your taxes, including income tax and national insurance, through your umbrella payroll provider. IR35 laws are also not applicable under this choice, therefore you won’t need to worry about them.

LIMITED Company

When you establish a limited company as a contractor, you take on the roles of director and shareholder. Salary and dividends, which are paid into a business bank account as after-tax earnings, can be used to pay yourself. One factor contributing to a limited company’s ability to provide a higher take-home pay is that the tax rates for dividends are lower and they are not subject to National Insurance.

If you select the limited company option, you ought to be able to open a business bank account. Limited firms need to file documents and complete paperwork on a fairly frequent basis. Though clients and agencies prefer to view registered firms as more trustworthy, this choice can be very profitable.

WE DO MORE FOR YOUR WORLD

All-in-one payroll and HR
your business

Tax Efficiency
Ease of set up and use
IR35 Consideration
Duration
Low earning contracts

Tax Efficiency

LIMITED

The form of contract that saves the greatest taxes. The majority of directors accept little pay. Dividends are not subject to National Insurance, and there are further alternatives for tax planning.

UMBRELLA

PAYE taxes your entire paycheck in full. less tax-effective than operating as a limited business.

Ease of set up and use

LIMITED

While company incorporation can be finished in a matter of hours, tax registration (VAT, Corporation Tax) can take several weeks. Compiling accounts requires monthly administration, and corporate directors have some yearly responsibilities.

UMBRELLA

Instant setup, minimal administrative work, and no legal obligations.

IR35 Consideration

LIMITED

Suitable if you want to serve numerous customers.

The chance of getting covered. Most tax advantages of being restricted are lost if you are detected.

UMBRELLA

Since you are already taxed as a “employee,” IR35 is irrelevant.
Not the best if you want to work for multiple clients at once.

Duration

LIMITED

Due to the administrative work involved in creating and then closing the company, it is not recommended for short-term contracts.

UMBRELLA

Good for contracts with short durations.

Low earning contracts

LIMITED

Not typically advised for contracts paying less than £15–20 per hour.

UMBRELLA

good for contracts with lower pay.

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When selecting a payroll service, a lot of new contractors want to know how much money they may keep. To determine how much money you’ll have at the end of the week or month if you work for a limited company rather than an umbrella company, use our take-home pay calculator.

You may be sure you are in excellent hands because our top goals have always been customer service and compliance as we are proud of the fact that we have helped over a thousand clients thus far. You will receive knowledgeable and individualised advice when you speak with our specialists to help you start contracting off on the right foot.

Our services for first-time contractors include:

Free consultation to review your situation and requirements.
Outline the most suitable payroll option for you
Explaining the basics of IR35 legislation and how it affects contractors
Full administration support
Unlimited tax advice
Dedicated team on hand to answer your queries
No minimum terms of service
24/7 access to a secure, mobile-responsive portal

To compare the amount of money you can take home at the end of the week or month if you use a limited company vs an umbrella company, use our take-home pay calculator.

The right choice for you

When deciding between payment arrangements, factors including changing legislation, the duration and cost of a contractor’s typical assignments, and others, must be taken into account. We have a thorough understanding of both constructions and have worked with their suppliers for many years.

Here is an illustration of a few of the fields in which we may support working professionals. We are not constrained to these industries, though. Contact us at any time to see how we can assist.