Why should contractors consider an umbrella company, rather than starting their own Ltd company?
Simple: because hourly/daily rates are dropping. And as they do it’s a straightforward calculation that says one pay vehicle is better than another. At the moment the balance is swinging in favour of the umbrella, ask me in a couple of years time and you might (fingers crossed) get a different answer. Ltd Companies are still better for some, it just depends on an individuals own circumstances. Q) How easy or difficult is it to convert to an umbrella solution? A) We’ll do it for you in half an hour. Q) How does it save contractor money? A) It may, or it may not. But consider this: Fact 1: one decent umbrella company will offer you the same return as another. Fact 2: there are no magic systems or devices to get around our tax laws – and if someone’s telling you otherwise start hearing alarm bells. Fact 3: the harsh reality of life is that you HAVE to pay tax. Fact 4: even with IR35 to contend with some will be better off with a Ltd Co, others using an umbrella. We just reduce the pain to
