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...]
Setting up your own limited company is quite a task, not to mention a big responsibility.
1. Contractors sometimes think that running their own limited company is their best option. This is not always the case, though. There's a lot of input required, on an ongoing basis. It can be just be too much for the contractor.
2. Many contractors who previously managed their own limited company, come to the conclusion that the extra workload was just not worth their while. See our introduction to an umbrella company for further information.
Even setting up the limited company in the first place requires a fair degree of work. To start with there is: the registration at Companies House (don't forget Forms 10 and 12), Articles and Memorandum of Association, the Appointment of Director, appointment of Secretary, accounting reference date.
Once that's done, then there's even more to do, including: a registered office address, opening of business bank account, VAT application, payroll scheme application, corporation tax reference application, accounting system, IR35 status, shareholding structure, salary levels and expenses.
As soon as the limited company is formed, there immediately starts ongoing chores to complete, often on a weekly or monthly basis.
Ongoing Contractor Chores when Running Your Own Limited Company:
As if that's not enough, as a company director, the contractor must understand a mass of rules and regulations associated with all limited companies.
This is why some contractors feel managing their own limited company is just too much extra work to take on, over and above their contract work.
We have sympathy with contractors in such a situation, especially when they're expected to understand complex legislation and detailed processes which are not part of their professional knowledge bank. Find out what an umbrella company does for a contractor.
This is why the umbrella company option is so ideal for today's busy contractor. The only thing a contractor has to do when they use an umbrella company is send in their timesheet.
The success of the umbrella company service comes from the policy of making the contractor's working life as simple and as hassle-free as possible.
We detail the six ways to judge an umbrella company to help you make the right choice.
If you're a contractor and currently manage your own limited company, why not think about using the services of an umbrella company instead? Apart from being cheaper than the accountant's fees you're paying now, you'll get your life back!
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If you are or plan to be a freelance contractor, you must get to grips with IR35. Ignore IR35 and it could cost you thousands!
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.