Whenever an individual is looking forward to start contracting, the first decision they need to make is whether they wish to join an Umbrella company or set up their own limited company. Both the options are up to the mark and come up with particular pros and cons.
If you are not sure which option whether Umbrella or Limited company suits the best, we will compare all the aspects linked with both to help you to figure out which one you can opt for.
When a person is new to a contracting, they usually contract through an Umbrella Company. The reason for choosing an umbrella company is that it will take care of income tax and National Insurance responsibilities on its own. There will be no need for an individual to look into admin task andcan focus on assignments only.
When a contractor is dealing with an Umbrella Company, they would get a contract of employment. Under the contract of employment, they get access to all the statutory employment rights and benefits which include maternity pay, holiday pay, Sick pay& paternity pay.
When a person is happy to take more responsibility, not disqualified to become a director, generally outside IR35 and wants to increase their take home pay, they will be going through a Limited Company. Here the contractor will receive more money as compared to the Umbrella Company.
The individual has to carry all associated administration with own support or through a accounting firm like DNS Accountants. The list of tasks is more and the individual dealing with Limited Companies have to devote hours in a week. The aspects which require there top most concerns include:
This sums up all about Limited Company and task to bear in mind while incorporating one.
An Umbrella Company is the best one to choose when an individual is looking to work on short term contract with no admin task.
Limited company is suitable for individual who wants to become a company director enrolling in a long term locum contract and ready to take full responsibility of handling all company compliance and accounting task.
After understanding about Limited Company and Umbrella Company, the question is which one is the best to choose?
It depends on the individual who is about to start temporary work. If they are ready to be an employee, they work via a Umbrella Company and wish to be adirector can go for Limited Company.
The earnings in Limited Company are higher compared to Umbrella Company. But the benefit of choosing an umbrella company is work without any hassle.
If you are looking to connect with an Umbrella Company, DNS Umbrella is happy to assist. We will help you understand all benefits of joining umbrella services. DNS Umbrella has supported many of the contractors and freelancers looking to work with Umbrella services.
At DNS Umbrella we always create the things in a manner that an individual can grab it as an opportunity and will be able to earn the benefits linked with it.