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...]
Contractor + Umbrella Company = Match Made In Heaven
Basically, an umbrella company is an off-the-shelf limited company used by around 500,000 contractors who don't like:
Of course, if that's your strength, you can see the upsides to setting up and running your own limited company.
Once you join an umbrella company (opening an account is free) all you have to do is send them your timesheet at the end of the week or month (dependent on what time cycle is agreed with your recruitment agency).
The umbrella company then:
It really is that simple! And doesn't even cost much. Better still, you don't have to send them any money as their fee is deducted from your pay before it goes into your bank.
Your umbrella company will do your:
The best bit is you can sleep peacefully at night with no worries about the tax man knocking at your door!
Second only to providing 'Limited Company' status, an umbrella company's main responsibility is to provide payroll solutions to its contractors.
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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.