Limited Company or Umbrella?

If you're new to contracting and not sure which trading option is best for you we have prepared a brief guide to assist you in considering your options.

 

Limited Company

Advantages

  • The most tax efficient method of trading
  • You retain control of your financial affairs
  • Opportunity to claim a wider range of expenses
  • More opportunities for tax planning
  • Access to the Flat Rate VAT scheme

Negatives

  • Not ideal for contracts less than £25,000 per year
  • Can be costly if you only contract for a short period and then return to employment
  • There is a certain amount of paperwork involved – possibly 20 minutes per month

 

Umbrella

Advantages

  • Simple to use – submit your timesheet and expenses and you will be paid
  • All tax and national insurance dealt with at source – no future liabilities
  • Ideal for short term contracts or contracts with a value less than £25,000 per year
  • No paperwork to consider – that will be someone else’s responsibility

Negatives

  • You are reliant on the umbrella provider to collect the money from the agency and pass it on to you
  • It’s a more expensive way to work than Limited as you will receive a wage subject to PAYE and national insurance
  • You need to submit / retain receipts on a weekly basis

 

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Testimonials

  1. I am completely happy with the service Simply Contracting are providing to me.  Everything has happened as it should.  When I have had queries (which are more about me building up my knowledge of the finance side) they have been answered quickly and accurately, even when the person the e-mail was addressed to was away.  I think the service offers good value for money so I am pleased that I went with my colleague's recommendation to use yourselves.


    Andy Brundrett, Cheshire

  2. Quite happy with things thank you - best service from any provider I've had over the years.


    David Powell, Glamorgan

  3. I have been involved in self employed contract working for more than 20 years for many different companies in various parts of the world. In this time I have been self employed, limited company, SC 60, and 714 certificated. With all of these ‘systems’ I have had many issues with the problems of invoices, payment, and the very time consuming process of accounting for my wages, tax payments, VAT , expenses etc. Over the years it has caused me a great deal of concern, time and worry that I did not need, especially when I was working away from home.
    If I have any questions or any other reasons to contact the office, I have always found the staff very helpful and polite and they have always explained and given answers that even I can understand. It suits me to sit back and have my accountancy service take care of the part of self employment that I do not enjoy.

    Bob Gorman

  4. May I take this opportunity to thank Irene, Cath, Lianne and all the staff at Simply Contracting, for the outstanding service you have provided.
    It seems a long time back since I started with you, and I would not hesitate in recommending your company.


    Brian Flint, Tyne & Wear

  5. I have been with simply contracting for a number of years and found the service to be excellent. Any queries or concerns are dealt with promptly and efficiently and the staff are always very helpful. Any information issued is easy to understand. I have and will continue to recommend them to colleagues.

    David McKeown

  6. I have been with Simply Contracting for several years and I have always received fantastic service.  Even bearing that in mind, the service levels I have received lately, through some very trying times, has been absolutely outstanding.  Nothing is ever too much trouble, and although the girls probably physically recoil when they see my name on any of their “to do” sheets – I always get a first class job delivered in the most personable of manners.  No question ever goes unanswered – unless I am asked it!  Folk usually only give feedback when things go wrong, but I think it is worthwhile to recognise excellence also – the service I receive is excellent.  Thanks, and long may it continue.

    Tom Elvin, Glasgow