Please bear in mind no umbrella company can ‘earn’ you more than any other – all umbrella companies must comply with HM Revenue and Customs rules and regulations.
Do not be swayed by clever marketing about increased take home pay or so called special allowances. If you take home X with one umbrella company you will take home exactly the same with a different umbrella company.
The only factor that will affect your take home pay is how much the umbrella company’s margin is, this doesn’t obviously mean you should choose the cheapest but it also means you shouldn’t base your entire decision on who makes the biggest claim on ‘take home pay’ in their marketing blurb.
- 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 umbreall company should provide you with a contract of employment which gives you all the employment rights and benefits as permanent workers such as sick pay, holiday pay and maternity/paternity pay.
- 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.
- Online portal for timesheet and expenses – faxing over timesheets will soon get boring, plus you face the possibility of them getting ‘misplaced’.
- 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.
Our sister company Parasol meets all of the above criteria to get in touch with their best advice team to understand the best route for you please call 0800 634 7526 or visit www.parasolgroup.co.uk.
Limited or Umbrella – but surely using an umbrella costs less than using an accountant and going limited?
The best route to take is entirely based on your individual circumstances around how much your assignment rate is, the length of your contract and how much admin you want to take on. Going limited and using a firm of accountants like SJD whose fully inclusive fees starting from just £120 plus VAT per month may not be too far off what many umbrella companies charge. This is quite a surprise to clients who are often lead to believe going limited and using an accountant is far more expensive.
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 way possible, meaning you’ll take home more of you contract.
Find below a few pages that you might find helpful in deciding which route to take:
- Take home pay calculator – How much could you be taking home?
- Limited or Umbrella? Can’t decide? – We help you decide which is best for you.
- Resources – All your resources for your contracting needs.
- First time Contracting or Freelancing? – A summary of the alternatives along with pros and cons
- Step-by-step Guide to Contracting – Download a FREE copy of our guide
- Take home pay case studies – Examples of contractors using limited and umbrella companies
- Expenses Guide – Know exactly what you can claim
- IR35 Guide – A great plain English guide to IR35
Accountancy services for Contractors and Freelancers from SJD Accountancy
If you are 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, then 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 and have more than 15,000 already.
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* face to face.
- 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. All this for a fixed fee starting from £120 plus VAT per month. Check our packages for more detail..
If you have any question about contracting or would like any further advice please call our new business team on 01442 275789 or email firstname.lastname@example.org
Appoint SJD Accountancy and never worry about your tax or accountancy affairs again!