Umbreall Vs Ltd

[Mary]

Hi guys,

Thank you so much for all the advice you have put up here

I've been reading through it - but still confused on the bottom line finnacial difference between ltd and umbrella

I am working abroad right now but coming to UK in few weeks to start new contract

I will be making 140k /pa on my next contract - i am firmly inside ir35 and not looking for a way around that.

Instead i plan on putting the majority of what I earn in a pension - about 110K pa - thus taking 25-30K as salary

My question is that with that structure - is there any finnancial difference between using ltd company and umbrella ???


Thanks!

[Borat]

Try searching in Google (UK): Limited vs Umbrella there are some pretty good FREE guides that explain all.

[chris79]

If you are inside IR35 I'd be tempted to say go Umbrella for its simplicity, plus less hassle.

Being inside IR35 you would be taking PAYE through your limited company anyway (if that's the route you chose to take), so really there's no =real= advantage in going limited?

[malvolio]

If you are inside IR35 I'd be tempted to say go Umbrella for its simplicity, plus less hassle.

Being inside IR35 you would be taking PAYE through your limited company anyway (if that's the route you chose to take), so really there's no =real= advantage in going limited?

Apart from the umbrella fees, which will easily outstrip accountancy ones... There's a sticky on this subject. It predates the binning of MSCs, but it still applies commercially.

And I still maintain that at least 90% of the people paying IR35 have no need to do so.

[chris79]

Apart from the umbrella fees, which will easily outstrip accountancy ones... There's a sticky on this subject. It predates the binning of MSCs, but it still applies commercially.

And I still maintain that at least 90% of the people paying IR35 have no need to do so.

Well yes, umbrella fees may be slightly more (£25 to £35 per week), but the person posting is taking home £140k a year? Like the post above, check out IR35 because if you can operate outside IR35 it's worth a LOT of money to you. Do you actually understand IR35 rather than just reading a paragraph on the web somewhere and thinking "I'm inside IR35" ?

When I first started out contracting last year, being new to it all I called prosperity4 as my first port of call, and the guy on the phone actually convinced me I was inside IR35. After a bit of research I discovered I was actually outside IR35, subsequently I now run my own limited company and do all my own accounts and books (although I have them checked yearly by my accountant)... but don't take anyones word for it, do the research yourself and understand what it all means. If this takes hours or days then it's worth it if you discover how to operate outside of IR35, its worth a LOT of money, especially on a 140k contract (10's of thousands?)...

[oraclesmith]

?!

I called prosperity4 as my first port of call, and the guy on the phone actually convinced me I was inside IR35.

Well he would, wouldn't he ?

[ASB]

With that potential size of pension contribution you might be at risk of it being disallowed. You might want to pay yourself everything as a salary and make the pension contributions personally - but you also need to consdier the differing impact between personal contributions paid net and getting tax relief and the company (or umbrella) paying them gross.

There has been a lot of discussion on that very subject.