Umbrella Company or Limited Company

When an individual decides to enter into the world of freelance contracting, the first thing to consider is the payment structure: should it be your own limited company or an umbrella company?

• A significant advantage of using an umbrella company is the speed, not to mention the simplicity.

Contrast this with running your own limited company where you have several issues to grapple with like running the business itself, completing complex paperwork and hiring a qualified & reputable accountant to manage the financial and legal side of the company.

And the red-tape will tie you up if nothing else does! Using an umbrella company means you only need to send over your signed timesheets each month.

All In One

The umbrella company service takes care of all payroll issues and other related tasks like calculating tax and National Insurance. An umbrella company is also ideal for those contractors that do not want to involve themselves too much with the finer details of spreadsheets and deadlines.

A contractor is better off using an umbrella company. This is true both in terms of cost and time. With an umbrella company working for you, the only thing you need to remeber is to send us your timesheet!

It is always important to remember that it is not always cut and dried when it comes to choosing between an umbrella company or your own limited company. There are grey areas for some contractors in which it is not conclusive if it is best to use an umbrella company or manage your own limited company.

Contractors should find out whether they are caught by IR35

Make the decision when you know about your IR35 status. However,i f nothing else, umbrella companies leave contractors with more time to enjoy the important things in life.

An umbrella company is ideal for those that are just starting as a contractor. Umbrella companies have the expertise and the experience that a first time contractor would be lacking.