Umbrella Company vs. Contractor Limited Company
If you’re unsure whether to set up a limited company or use an umbrella company then there are a few things you should consider. You need to think about what work you have in the pipeline, how long you plan to contract for and your daily or hourly rate.
If you have at least a 3 month contract in place, paying more than £15 per hour and you are planning to contract or freelance for at least 12 months then it may be worth considering setting up your own limited company. There are other things to take in account such as your eligibity to be a Director and if you’re happy to raise your own invoices. A contractor limited company is generally considered to be the best option, as you will usually take home a greater percentage of your earnings each month than you would via an umbrella company and we would always suggest working alongside qualified accountants such as ICS Accounting to ensure you and your limited company are operating compliantly and paying the correct amount of tax.
If you are only planning to undertake short term roles and are likely to go back into permanent employment in the next 12 months then you may be best joining an umbrella company like ICS Umbrella. You’ll become an employee of ICS Umbrella, benefiting from full employment rights. Just submit your timesheets and we’ll get you paid on time. What’s more, if your circumstances change, you can seamlessly upgrade to ICS Accounting.
We welcome you to get in touch with one of our consultants to discuss your individual circumstances in greater depth and ensure that we can outline the best solution for you.
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