Umbrella vs Limited Company
Limited Company
Having a limited company means that you will be running your own business. This could be the right choice if you have complex financial affairs or multiple income streams. It may also lead to higher net returns after the deduction of taxes.The responsibilities, however, mean you are not always free to get on with working! A limited company generally means the following:
- You are a director of your own company and need to keep Companies House informed of your Company's dealings
- You will need to pay for the services of a reliable accountant
- You must produce accounts, invoicing and VAT records
- You will be responsible for submitting and paying accurate corporation tax returns
- You must ensure that you conduct regular IR35 reviews to ensure you are on the correct side of tax law
- You will be required to respond to communications from accountants / HMRC / Companies House etc.
- You will be responsible for invoicing the agent
- You will need to run a company bank account
- You must ensure that all documents / returns are filed in good time to avoid late filing penalties
- You will be required to complete an annual self assessment form to declare any dividends received to the HMRC and pay any extra tax liabilities due on these dividends each year and estimated amounts throughout the following year.
Umbrella Company
Joining an umbrella service means you become a PAYE employee, whilst retaining the freedom to work where you want, with all the administration done for you. Conduit People Management, as the umbrella company, will contract with the agency/end client and provide you with a contract of employment.Therefore, this means Conduit People Management provides a comprehensive employment service, easing the administrative burdens of running a limited company. It allows contractors the freedom not to worry about the IR35 contractors' tax (your status is 'employed' so IR35 cannot apply), and benefit from being legally tax-efficient.
As an umbrella company we can give you some of the tax efficiencies that genuine business expenses allowances provide. These can be offset against tax which are directly negotiated with and agreed by HM Revenue and Customs.
The main benefits of working with an umbrella company like Conduit People Management are:
- Complete peace of mind of knowing that all legal, contractual and tax obligations are being met
- All your client billing, payroll management, expenses claims and tax deductions are left to the experts
- A tried and tested solution, used previously by thousands of contractors, providing a comprehensive end to end process, making contracting easier
- Service assurances that your weekly or monthly pay is taken care of and you get paid regularly and on time
- You get a complete employment rights package and inclusion of comprehensive Professional Indemnity Insurance and Employers / Public Liability as part of the service
To find out more about our services and how they can benefit you, call us free on 0800 954 9942.
