Contracting in the UK

A guide for those 'outside' the UK considering contracting 'inside' the UK.

If you are already in the UK, you may find the following pages, guides and case studies useful:

Whether you are thinking of working in the UK under a HSMP (Highly Skilled Migrant Programme) or are allowed to work in the UK under other such Government approved schemes, it is perfectly acceptable for you to work through your own limited company or work through an umbrella company.

In order to work in the UK you may need a work permit or a visa; you will also need a National Insurance Number which is a personal number that is used to record an individual's NI contributions and credited contributions. You will also need a personal bank account and if you are planning to work through your own limited company a company/business bank account.

There are a few FREE downloadable guides that you may find helpful:

Lets first consider your options
1. Operate through your own limited company.
or
2. Work through an umbrella company.

We've summarised the alternatives along with the pros and cons of each method on these pages:

You may also find the following pages, guides and case studies helpful:

Contracting through your own limited company

It is often said that contracting through your own limited company is a daunting task. In fact, nothing could be further from the truth.

Administering your own limited company with the support a dedicated firm of accountants like SJD Accountancy, is simple, efficient and inexpensive.

Contracting through your own limited company does require a little more work than using an umbrella company; you'll need to form a company which will just take five minutes - you can form your company and check name availability here.

Benefits of Contracting through your own limited company:

  • The most tax efficient way of working.
  • Claim a wide range of expenses - accountancy fees, equipment, software etc.
  • Access to the Flat Rate VAT Scheme (saving around £2,000 - £3,000 a year on a typical contract value)
  • Even if inside IR35 it may still be worth it.
  • You keep complete control of your financial affairs meaning you do not have to risk your money with any third party administrator.
  • Running your own business isn't difficult; submit spreadsheets to your SJD accountant - just like Umbrella time sheets and expenses.

Downsides

  • There is a certain amount of paperwork involved, usually about 10 - 15 minutes per month.

Working through an umbrella company

This is where you 'the contractor' essentially become an employee of the umbrella company.

You submit time-sheets to the umbrella who will in turn, invoice the end client (or agency) for the work done by you. You will then be paid as a PAYE employee less the umbrella fee.

Benefits of using an Umbrella Company

  • Very easy to use, you simply enter your timesheet and expense details and wait to be paid.
  • All tax and NI is deducted before you receive your money, so you will have no further taxes to pay.
  • Ideal if your contract is less than three months.

Downsides

  • You will receive a salary that is subject to full PAYE Tax and NI, it's just like being a permanent member of staff again.
  • You are reliant on the umbrella company to collect your money from the client or agent and then to pay it on to you.

Accountancy Services for Contractors

At SJD we have put together a complete package which will take care of all your company's needs, this includes:

  • Year-end accounts*
  • Corporation tax
  • Payroll bureau
  • Dividend administration
  • Dealing with HM Revenue and Customs and Companies House
  • Quarterly VAT Calculations 
  • Support with Annual Returns
  • Personal Taxation
  • Access to your own dedicated accountant* for all help and advice
  • Free bookkeeping software

Our On-line Company formation service offers same-day formations and includes opening a Company Bank Account, VAT/PAYE registration and advice on share structure.

If you have any question about contracting or would like any further advice please call our New Business Team on 01442 275789 or email newbusiness@sjdaccountancy.com.

Call Back Request

12 + 5 =
Solve this simple math problem and enter the result. E.g. for 1+3, enter 4.

Speak to a
friendly expert
01442 275789

Monday to Thursday (8am to 8pm)

Friday (8am to 7pm)

Saturday (10am to 4pm)

SJD Accountancy

SJD Accountancy are the UK's largest specialist provider of fixed fee, Limited company accountancy services to contractors; we've been acting for contractors across the UK since 1992 and have more than 15,000 clients.

We are the only national specialist firm of contractor accountants with offices nationwide. SJD Accountancy has more qualified staff than any other firm in our market with qualifications from the following major tax and accountancy bodies - ATT, AAT, CTA, ACCA, CA, ACA and FCCA.

  • Unlimited face to face meetings. This is a unique service only SJD Accountancy offers - unlimited face to face meetings across the UK - tax is complicated and sometimes only a meeting will do.
  • UK's largest contractor accountants with more qualified staff. No call centres, no outsourcing, no automated call handling. Simply telephone, email or meet your own dedicated accountant face to face.
  • Money back service guarantee. All your Emails received by 4pm on any normal working day will be answered the same day. Should it be necessary to leave a telephone message it will be answered same day/following day latest or we will make a full refund of that months fee.
  • Outstanding reputation. We have won more awards for customer service and accountancy excellence than any other firm in our market, including: Best Accountant for Contractors, Accountant of the Year and Best Professional Service Team to name just a few.
  • All inclusive low cost fixed fee accountancy package which includes completion of accounts*, payroll bureau, dividends and corporation tax computations, personal taxation, free bookkeeping software, your own dedicated accountant* and all company returns for a fixed fee starting from £120 plus VAT per month. Check our packages for more detail.

If you have any questions about contracting or would like any further advice please call our new business team on 01442 275789 or email: newbusiness@sjdaccountancy.com. Our new business team is open Monday to Thursday (8am to 8pm), Friday (8am to 7pm) and Saturday (10am to 4pm)

Appoint SJD Accountancy and never worry about your tax or accountancy affairs again.

Form your own limited company with SJD - our same day online company formation service includes company bank account set up, VAT/PAYE registration and advice on optimum share structure. 

You may also find the following pages, guides and case studies useful:

*If you would like us to complete your company year end accounts we simply ask that you have been a client of SJD for one year or have made 12 monthly payments. All accountants are part or fully qualified.