Employment Status

Are you a contractor? If you work for someone else, it is important to know whether you are working for that person in an employed capacity or in a self-employed capacity as an independent contractor.

Your employment status will determine the charge to tax on income from your employment or self-employment. It will also determine the class of NICs, which are to be paid.

Umbrella Companies employ you for tax purposes and complete central returns for all their contractors. It's less hassle and more flexible for you but take home pay is typically less than that the limited company option.

The best option for you depends on your plans, 'one off' contract or 'contractor for life'? [Read More...]

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Contractor limited company or PAYE umbrella company

So You Want to be a Freelance Contractor

Any individual can go about becoming a contractor. You may be in full time employment or just starting out and wondering how your skills can earn you a decent income.

Either way you want to explore what life as a contractor means and how best to go about it.

Start By...

First off, being a freelance contractor is quite different from a permanent member of staff at a company. A contractor will have a series of temporary jobs rather than one full time permanent position. Each of the jobs will be for a

  1. Specific period (eg six months)
  2. Specified amount (usually defined in terms of an hourly or daily rate)
  3. Specific task or role to complete

The contractor is in effect selling their skills, knowledge and aptitude on a per job basis. The more unique your skills are the higher the rate you can command. The better you perform the more likely it is that you can increase your rate on future jobs.

Yes?

A 'good' contractor is hard to define. A contractor is, after all, a person and we all know each one of us is unique! But certain traits are identifiable and the more of these qualities you have the more likely it is you will succeed at contracting.

Can you say 'Yes' to one or more of these characteristics:

  • You get on with strangers and like meeting new people.
  • You understand and can fulfil specific functions within a wider corporate strategy.
  • You can cope with working at different sites on a regular basis.
  • You can adapt to different cultures and work ethics.
  • You can impart your knowledge to other people and businesses in a manner which others can understand.
  • You have the maturity to know when to contribute and when to stay silent.
  • You can perform your job without constant supervision from the client.
  • You can identify and recommend further work which the client may have overlooked resulting in a win-win solution for you both.
  • You can ensure your client will always know what you have done so far, and what work is still outstanding.
  • You complete your job on time, satisfactorily and within any specified budgets.
  • You can report back to the client, at any stage of the job, in clear simple terms.

The more items you can tick the sooner you will build your reputation and the more in demand you will become. Once a good contractor is identified a client will do their best to retain their services. You may find your contract is extended or at the very least you will be kept on record for any new jobs that arise in the future.

What to do Next

If contracting is still something you'd like to do and you think you can succeed your next step should be to identify and contact two or three specialist recruitment agencies who cover your skills.

Ask the recruitment agent(s) how in demand your skills are, and get an idea of the demand from clients you can expect. Ask them if they have any current assignments that would suit you and, in general terms, how much you could earn.

Umbrella Company or Limited Company

Still not sure what is best? The good news is that Tempo provide an umbrella company and Limited company accounting solution.  Whilst they know that a limited company is your best option, they provide both solutions for great flexibility.

Go Umbrella and, if you later decide you want to Go Limited, Tempo will transfer you over at no extra cost.  At last, a company that understands what contractors and freelancers need.

  • Tempo put you in charge of your money and guide you to ensure you get the best return on your earnings.  Umbrella Companies have to pay PAYE and National Insurance, even if the figures and manipulated.  With a Tempo accounting solution, you are guaranteed to be working within HMRC limited company legislation (so no umbrella company compliance concerns). 
  • Tempo Accounting do the hard work for you including setting up your limited company, providing an online tax and payroll system that blows the competition away, providing take home pay that far outstrips that provided by an umbrella company.

Tempos Limited Company accounting package will always outperform the Umbrella market in terms of take home pay, Umbrella companies may claim they can provide high take home rates, tempo actually deliver.  Call 02031 372 946 or click here to request a quote and call back to discuss your options.  So, if you're not sure, start with an umbrella solution from tempo and transfer over to a limited solution when you are ready, simple.

  1. What is contracting and how can I become a contractor?
  2. You've got the contract, what now?
  3. What is an umbrella company?
  4. Umbrella company myths
  5. Umbrella company FAQs
  6. Umbrella company paperwork
  7. Umbrella company expenses
  8. Calling an umbrella company
  9. 10 questions to ask your umbrella company
  10. IR35
  11. Paying Employer's National Insurance
  12. Choosing an umbrella company
  13. Umbrella company alternatives

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HMRC Compliance

It's the basics... Compliance with Tax, VAT, PAYE and fiscal arrangements is mandatory for contractors regardless of whether you use an umbrella company or your own limited company.

Incredible then that there are still rogue umbrella companies and limited company accountants who expose their contractors to fraud. Umbrella Compare provides THE solution, we thoroughly vet all umbrella companies and limited company accountants that we list [Read more...].

Umbrella Compare provides a holistic overview of contracting with the aim of helping new and old contractors find the right payroll solutions. Contracting should be about focusing on the contract, not payroll, accounting, HMRC and bureaucracy.