How does using an umbrella company affect my take home pay?
Parasol, our sister company, ensures high level service delivery and meets all the above criteria. To get in touch with Parasol’s best advice team, contact .
If you compare umbrella company take home pay figures, you’ll see that there’s little to no change in what you will take home between the various umbrellas.
The only factor that will affect your take home pay is the umbrella margin. Be cautious of basing your decision on price alone; consider the service level you’ll be receiving and ensure the umbrella company complies with HM Revenue and Customs rules and regulations.
Parasol have kindly been provided a few points to think about.
- Fixed fee structure – some Umbrella Companies charge a percentage of your invoices which can prove extremely expensive.
- Compliant with HMRC rules and regulations – but can they prove it? Of course everybody will say they are compliant but what awards/accreditation do they have to back this up.
- Check that they are a genuine employer – an umbrella company should provide you with a contract of employment which gives you all the employment rights and benefits as permanent workers.
- Guaranteed service levels – most Umbrella Companies will promise a variety of things but unless there is a clear service guarantee, you have very little recourse.
- Established company & part of a chartered firm of accountants and industry body such as the FCSA (Freelancer & Contractor Services Association) – as the Umbrella Company will be receiving your funds first, you need to be sure they won’t disappear with it.
Looking for an umbrella company?
We understand that the right support by your side is crucial, whether you’re working through your own limited company or under an umbrella. That’s why our sister company, Parasol, is here to help.
Using their years of experience in supporting contractors, they’re well placed to get you up and running and give you the tools to help you throughout your career.
Limited or umbrella – is using an umbrella cheaper than using an accountant and going limited?
The best route to take is based on your individual circumstances, such as your assignment rate, the length of your contract and how much admin you want to take on. Going limited and using a firm of accountants like us will cost you from just £120 plus VAT per month. That may not be too far off what many umbrella companies charge – usually around £25 per week. This often comes as a surprise to clients who are lead to believe going limited and using an accountant is the more expensive route.
If you meet a certain set of criteria, any accountant will tell you that working through your own limited company is the most tax efficient option. We’ve done some case study examples to give you
Compare umbrella with limited
Both options offer a number of pros and cons, depending on your circumstances. Our free guide will help you decide what structure is best for you.
What’s in the guide?
- Umbrella & Limited – the differences between the two structures.
- Advantages & disadvantages – which route is best for you?
- Rates of take-home pay – how much could you earn?
Accountancy services for Contractors and Freelancers
Are you already a contractor or freelancer operating through your own limited company, or thinking of working as contractor or freelancer or even working through an umbrella company and want to go limited? SJD Accountancy can give you a wealth of information and advice – as well as providing a low cost fixed-fee accountancy service which has been developed specifically for freelancers, contractors, consultants and Interim Managers.
SJD Accountancy is the UK’s largest specialist provider of fixed fee, limited company accountancy services to freelancers, contractors, consultants and Interim Managers. We’ve been acting for clients across the UK since 1992 with over 15,000 current clients.
We are the only national specialist firm of accountants with offices and meeting locations across the UK. SJD also 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 another unique service, only SJD offers unlimited face to face meetings – tax is complicated and sometimes only a meeting will do.
- Access to your own dedicated accountant*. No call centres, no outsourcing, no automated call handling. Simply telephone, email or meet your own dedicated accountant.
- Our Customer Promise. Respond to any question sent to your accountant or any dedicated department within 24 hours. If we need more time, we will update you as soon as we can and we promise to keep you informed of the progress we are making in answering your question.
- Outstanding reputation. We have won more awards for customer service and accountancy excellence than any other firm in our market.
We offer an all inclusive low cost monthly package which includes completion of accounts, payroll bureau, dividends and corporation tax computations, personal taxation, free bookkeeping software, unlimited access to your accountant and all company returns. Check our packages for more detail..
Appoint SJD Accountancy and never worry about your tax or accountancy affairs again!