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...]
Why would a Contractor consider using an Umbrella Company? If you're an individual who is considering becoming a contractor you probably already know that you need the support of a 'back-office' support team. This is because as a contractor you need help with your administration.
Contractors need help with matters such as:
You could set up and manage your own limited company, but that means you'd become responsible for all the above as well as having to pay for the services of a specialist accountant.
This is quite a good way of contracting if you're one of those people who enjoy coming home after a long days work and sitting in front of a computer filling in endless excel spreadsheets.
But, what about if you're not good at form-filling, remembering vital deadlines or have better things to do with your spare time? Price, convenience and ease of use are the main benefits of using an umbrella company:
The umbrella company will contact your recruitment agency and sort out all the legal contracts for you. It will also handle all the necessary HMRC forms and make sure you're complying with all the latest employment laws.
So the days of contractors having to be expert accountants are well and truly over. Gone is the legal burden resting with the contractor. Gone are the late nights pouring over complicated forms.
An umbrella company service is designed specifically around contractor needs and comes at a very reasonable cost - which is actually cheaper than a standard accountant's charge.
What's even better is that an umbrella company's fee often includes many other features such as inclusive insurances, access to free expert advice and special discounts on a range of services like mortgages and pensions.
Are you ready to go umbrella? Use our umbrella company comparison calculator and compare prices, reviews and view a personal take home pay example.
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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.