Reply
 
Thread Tools Search this Thread
 
Old 23 October 2012, 13:33   #1
Member
 
Hightower's Avatar
 
Country: UK - England
Town: Fareham
Length: 6m +
Join Date: Sep 2003
Posts: 7,855
Ltd Co, vs Umbrella?

During my whole career all I've ever been is PAYE but though redundancy I have the chance to accept a contract job and was wondering what the pro's and con's were for each type.

I really want something hassle free.
__________________

__________________
Andy

Looks Slow but is Fast
Member of the ebay Blue RIB cover club.
Hightower is offline   Reply With Quote
Old 23 October 2012, 13:40   #2
Administrator
 
John Kennett's Avatar
 
Country: UK - England
Town: Brighton
Length: 3m +
Join Date: May 2000
Posts: 6,829
Limited company is likely to cost around 1000 more in accountancy fees than self employed or partnership. Unless you're turning over hundreds of thousands there's no real tax benefit to being a Ltd Co.

If you want limited liability then you can still do that as a partnership (LLP).

Not really sure what you mean by umbrella though!
__________________

__________________
John Kennett is online now   Reply With Quote
Old 23 October 2012, 13:58   #3
Member
 
ppenman's Avatar
 
Country: UK - England
Town: Wickford, Essex
Boat name: Wanderer
Make: Ribeye, Zodiac FR
Length: 7m +
Engine: Yamaha F300, 25 2S
MMSI: 235095667
Join Date: Aug 2010
Posts: 219
Hi, I'm sorry to hear about your redundancy.

I've worked as self employed and under an umbrella company. What I found is that if you are wanting to return to work as an permanent employee it's a lot easier (especially with tax etc) to use an umbrella company. However, if you foresee that you want contract long term then setup a limited company.

By the way, I used GIANT as my umbrella employers. They were ok with me and get one of the best reviews.

Good luck.

Peter.
__________________
ppenman is offline   Reply With Quote
Old 23 October 2012, 13:58   #4
Member
 
Bern Hanreck's Avatar
 
Country: UK - England
Town: Norfolk/Suffolk Borders
Boat name: La Bamba
Make: Ribcraft
Length: 5m +
Engine: F100 Yam / 5Hp Suz
Join Date: Oct 2002
Posts: 707
I know very little about this , but you may need to also do a bit of research on " Zero Contract Hours "

......UNISON the public service union - Activists zone
__________________
Bern Hanreck is offline   Reply With Quote
Old 23 October 2012, 14:17   #5
Member
 
mitchc's Avatar
 
Country: UK - England
Town: Essex
Boat name: Kestrel
Make: Gemini
Length: 6m +
Engine: Opti 150
Join Date: Oct 2010
Posts: 289
I've been contracting for the last 5 years, initially as a ltd co. but for the last 2 years under a umbrella.
Try giant or JMK. I've used both and are both fine.
Umbrella basically allows you to claim back some of your expenses against your tax code, therefore taking home more pay.
Also you normally get a higher hourly rate if you are ltd or umbrella as than when paye again meaning you take home more at the end of the month:-)

Give them a ring and they'll explain it all.
__________________
mitchc is offline   Reply With Quote
Old 23 October 2012, 14:24   #6
Member
 
Country: UK - England
Town: NW Surrey
Boat name: Lady Helen
Make: Avon
Length: 3m +
Engine: Out Petrol 3.5 & 15
Join Date: Aug 2011
Posts: 222
I had a month using an Umbrella company then 6 years as a Ltd company (until 2001 so things may have changed a bit since then).

The advantages of a limited company at that time were, you had control over whether you paid dividends (thus avoiding NI) or salary, you could employ family members, buy equipment that could be used at home, have a company car, hold a Christmas celebration (75 per attendee), pay large amounts into a directors pension,earn interest on VAT, NI and tax to be paid quarterly, hold an AGM at whatever location you chose (these always coincided with my wedding anniversary w/e).
__________________
EnglishLes is offline   Reply With Quote
Old 23 October 2012, 15:08   #7
Trade member
 
Ribstore's Avatar
 
Country: UK - England
Town: UK
Length: 5m +
Join Date: Nov 2010
Posts: 128
Quote:
Originally Posted by Hightower View Post
During my whole career all I've ever been is PAYE but though redundancy I have the chance to accept a contract job and was wondering what the pro's and con's were for each type.

I really want something hassle free.
Andy, just get some prof advice/do lots of research otherwise you may find yourself back in PAYE land, retrospectively + interest! If genuinely contracting then you will be fine but if simply 'dressing up' a contract of employment as a contract for services, i.e. caught by IR35 (umbrella or otherwise) then HMRC will most likely enquire and, boy, they are like a dog with a bone!

The Revenue are getting much more agressive with tax avoiders (god help evaders), even perceived avoiders are now targeted [e.g. we regularly receive unsolicited letters from HMRC saying 'own up and we will not come after you for unpaid tax'], and, quite frankly, they have seen it all before...AGM's in the Caribbean (misses the only shareholder? Artic Systems case!?), company car (benefit in kind/no doubt the P11d is ignored!), etc

What I do know is that if an artifical avoidance scheme is created then HMRC usually move to close it down, if you have joined up to that scheme, then you are usually left holding the tax baby - umbrella services

Chris
__________________
Parts and advice for RIBs and SIBs
www.Ribstore.co.uk
Ribstore is offline   Reply With Quote
Old 23 October 2012, 16:36   #8
Member
 
Hightower's Avatar
 
Country: UK - England
Town: Fareham
Length: 6m +
Join Date: Sep 2003
Posts: 7,855
Thanks for your input guys some useful info there. I think that if I do accept the job I'll go the umbrella route to start off with. It does seem much simpler to use and can have some advantages like have Public liability insurance built in.
__________________
Andy

Looks Slow but is Fast
Member of the ebay Blue RIB cover club.
Hightower is offline   Reply With Quote
Old 23 October 2012, 16:56   #9
Member
 
falcon0310's Avatar
 
Country: UK - England
Town: surrey
Boat name: el nino
Make: tornado humber
Length: 7m +
Engine: outboards
Join Date: Jun 2009
Posts: 958
depends what you do, ive been self emmployed for 19 years, and you dont want hmrc on you pm if you want know more
__________________
falcon0310 is offline   Reply With Quote
Old 23 October 2012, 18:23   #10
SPR
Trade member
 
SPR's Avatar
 
Country: UK - Scotland
Town: Central Belt of Scotland
Boat name: Puddleduck III
Make: Bombard
Length: 5m +
Engine: 50 HP
Join Date: Mar 2009
Posts: 2,066
This is interesting read:

Self Employed Contractors | Your Staff | Clubs & Associations | Information & Advice | RYA

but if in doubt - talk to to a good accountant , or contact Federation of Small Businesses.

regards

S.
__________________
SPRmarine / SPRtraining
RYA Training Courses & Safety Equipment Sales
SPR is offline   Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off





Copyright 2002- Social Knowledge, LLC All Rights Reserved.

All times are GMT -5. The time now is 10:19.


Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.