As a contractor, there are a number of ways in which you can operate, but two key choices are: through your own limited company or under a PAYE umbrella. Both options offer a number of pros and cons depending on your experience, the length of time you intend on contracting and the level of time you have to dedicate to paperwork.
To better help you understand your options and which route is best for you, we’ve put together our handy downloadable guide and video.
Forming your own limited company
Contracting under your own limited company means that you will be in charge of your accounts, your salary and your taxes. You will need to establish your limited company and open your business bank account. As the limited company director, you will control invoicing, the company bank account and decide on how much to pay yourself, which is made up of a combination of salary and dividends.
Contracting through a PAYE umbrella
Working under an umbrella company, on the other hand, means that this will be the responsibility of your umbrella company who will act as your employer. You submit your timesheet to your umbrella company who will then pay you a salary with National Insurance and tax already deducted.
What’s in the guide?
In our Umbrella vs. Limited Company Guide, you will find plenty of information surrounding:
- Umbrella and limited – the differences between the two
- Advantages and disadvantages – which route is best for you?
- Rates of take-home pay – how much could you earn?
Help from an expert
Whilst we at SJD Accountancy are experts in providing support for those who decide to go down the limited company route, if you decide that working under an umbrella is for you, we can provide this support to you through our sister company Parasol, who provide market-leading umbrella support to contractors. Our team of experts want to make sure that you choose the right solution for you, so will provide you with the best advice.
Decided to go limited? Visit our Limited Company Formation page to start your journey as a limited company director today. If you have any further questions regarding which route is best suited to your needs, you can contact our team of experts on the below form