Umbrella Vs Limited Company
|PAYE Umbrella||Limited Company|
|All tax and NI is deducted before you receive your money, so you will have no further taxes to pay.Good if you are unsure if contracting is for you and you’re really just in between permanent jobs.||You keep complete control of your financial affairs meaning you do not have to risk your money with any third party administrator.Running your own business isn’t difficult; submit spreadsheets to your accountant – just like umbrella time-sheets and expenses.|
|Ideal for contracts less than £25k per year.||Claim a wider range of expenses|
|Very easy to use, you simply enter your time sheet and expense details and wait to be paid.Someone else will be doing all the paperwork.||The most tax efficient way of working.Access to the Flat Rate VAT scheme.|
|You are reliant on the umbrella company to collect your money from the client or agent and then to pay it on to you.The most expensive way of working. You will receive a salary that is subject to full PAYE Tax and NI, it’s just like being a permanent member of staff again.||Can be costly if you contract for a very short period of time, then go back to permanent employment.There is a certain amount of paperwork involved, usually about 10 – 15 minutes per month.
Not ideal for contracts less than £25k per year.