Viewing What are the Advantages of Running your own Limited Company? from 6 Limited Company or Umbrella Company - Umbrella Company or Own Limited Company - What is Best for You? Written by Contractor Supermarket

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What are the Advantages of Running your own Limited Company?

 

Running your own limited company can be beneficial in terms of tax. Any contractor who passes the IR35 test, should consider managing their own limited company.

If IR35 does not apply to your contracts, then you could be paying less tax.

Increasing net pay is the key benefit when deciding whether to go through all the hassles involved in setting up and running your own limited company.

If you're a contractor who is just getting started, you'll be thinking about how you want to trade. All contractors have to work through a limited company, of some description.

Ky Smith, Managing Director of GoUmbrella, advises contractors that there are two ways to trade through a limited company:

1. "Setting up your own personal limited company, or
2. "Using the services of an umbrella company."

Umbrella Companies Work

An umbrella company is the best method of trading through a limited company for most contractors. Though, for a small minority of contractors, an umbrella company may not be the best option.

Take the IR35 test, here, to see if running your own limited company is viable

Setting up and managing your own limited company could be the right choice for a contractor who passes the IR35 test.

Ky Smith, Managing Director of GoUmbrella, suggests contractors should do a bit of homework first:

"To start off, research more about the responsibities of running your own limited company.
"Consider your lifestyle. Do you have the time to spend hours dealing with red-tape?
"Check out how an umbrella company helps with your paperwork"

Umbrella companies are easy to understand. Just take a little time to read through the basics and stay away from the administration trap that is your own limited company.

 

Visitors who read this article went on to read these articles:

1. Considerations when running your own limited company
2. Read an independent review of GoUmbrella
3. What is an umbrella company?
4. 24 - month rule for business expenses
5. Over 70,000 of the latest contract jobs in the UK 

 

 

written on2010-08-22 00:13:32

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