Options on how to get paid as a contractor
As a contractor, sometimes it can be confusing as to the best way to turn especially when you first start out in the world of contracting, so Clarity look at the options on how to get paid as a contractor…
Do you go Ltd? Do you go umbrella? I have been told my assignment is inside IR35 and I don’t know what to do? What is the difference between Ltd and Umbrella?
Here at Clarity, we will always be happy to talk you through the options available to you and ensure that you choose the route that is best suited to your needs.
So let’s take a look at some of the things you need to consider…
Benefits of operating via an Umbrella Company…
Umbrella is seen as the simple, hassle free way to operate as a contractor – The only paperwork you will need to do once you are set up is to complete a timesheet online via our portal, and we will take care of the rest processing your net figure into your personal bank account and issuing you with a payslip to confirm all of your taxes have been paid correctly.
You only pay the umbrella margin for the time you are on assignment with us – If you are not working, then you will see no charge for that period, on that note there are no sign up or exit fees either.
You are covered by our comprehensive contractor insurance package – So you don’t need to arrange any insurances for the period of time you are on assignment with us.
You are deemed an “employee” under a contract of employment with ourselves – Which means you are entitled to statutory employment rights during your time with us.
You are able to contribute to our flexible pension scheme – Which is processed via salary sacrifice meaning you get to save for your future whilst saving a little on tax and NI contributions.
Benefits of operating via your own Ltd Company
A Limited company is the most tax-efficient structure through which to conduct your business. You can pay yourself a combination of salary and dividends to benefit from the different tax-free allowances available. You can make tax-free pension contributions through the company. It may also be possible to leave funds in the business to extract in future years. We work closely with our preferred accountancy provider, Integro Accounting, who can talk you through everything you need to know about operating as a Ltd Company.
Integro Accounting are rated 5/5 by clients on Google. Their all-inclusive accountancy package covers all business and personal taxation needs, from the support and guidance of a dedicated accountant you can meet and contact at your convenience.
Please note that operating as a Ltd company does come with higher administrative burdens over working via an Umbrella.
You will be required to keep track of income and expenses and provide information for the submission of year-end accounts and your tax return.
With the changes coming into the Private Sector for IR35, it may also mean that you are unable to operate via your Ltd company, so this is something that we can help talk you through.
Easy Switch: the ability to “switch” between Ltd & Umbrella at no extra cost!
Here at Clarity, we appreciate that one size does not fit all, and that circumstances can change. With the proposed changes to liabilities for IR35 coming into play in April 2020, we have partnered with industry leading accountancy experts Integro Accounting – to ensure we can offer you the options needed to suit your requirements.
Our ‘Easy Switch’ package is ideal for contractors who want the flexibility of working both inside and outside of IR35; you get to keep your Limited Company open whilst taking full advantage of our umbrella payroll for those assignments where you are caught inside IR35.
Two services, one cost, no compromise!