Should Contractors Choose Limited Companies, Umbrella or be Self-employed?
What option is the best for Contractors?
At GrowFactor we realise that contractors have to make some difficult choices; latte or Americano, single shot or double, carrot cake or gingerbread! That’s why you should leave the decision on how to work your contract with us.
We have a team of in house experts who can are able to give you a plethora of professional advice on all your accounting questions be it umbrella companies, IR35 or VAT.
We have detailed some information for you below so that you have the lowdown:
- The majority of contractors work through their own limited companies.
- This offers significant tax saving as long as you are not within the IR35 scope (speak to us about IR35 if you are not sure about this).
- If you invoice from the company, you have the potential to make significant income tax and national insurance savings by paying yourself a minimal salary then taking the required remainder of earnings as dividends from the company profits.
- You will pay less tax on dividends than on salaries.
- You can claim any expenses that are related to the day to day running of the business.
- You as the contractor have complete control over your money and the company.
- Money does not have to pass into a third-party bank account, so faster transaction time and no risk to these earnings.
Some contractors choose to work through an umbrella company but this proves to be far more expensive because their charges include all the administration overheads and the structure is not as tax efficient; thus, resulting in lower take home wage. Furthermore, with an umbrella company you open yourself to some risk as your money is paid in to their bank account which you have no control over. Should that umbrella company get into trouble, which does happen, you could lose your wages.
There is one disadvantage to running a limited company and that is increased paperwork. But that is what we at GrowFactor are here to help with! You can leave all of the hassle of dealing with your accounting to us. All you need to do is come up with an awesome company name and we’ll take care of the rest for you. We’ll deal with the taxman on your behalf – avoid the accounting jargon and HMRC’s hold times! All the extra limited company paperwork will be included in our monthly fee. We can do your Self Assessment too!
At GrowFactor we are an online paperless accounting practice which means at a touch of a button you can easily keep an eye on everything anytime, anywhere so you can focus on what really matters – making as much money as possible, so that you are that one step closer to your dream stately home in the country!
GrowFactor now has a tailored Contractor Package designed to meet each Contractor’s specific needs. If you’d like to learn how your livelihood could benefit from GrowFactor , please provide your details today for a free consultation.
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