This is my first post and this sounds like a stupid question to me but it's one I need answering!
My first contract was through an umbrella company. I never got less than 63% of the day rate with nothing else then to pay out.
I looked at the limited company or umbrella comparisons and decided to go with the limited company and register for the flat rate scheme in the belief I would be better off.
It appears I'm paying 20% of my sales invoices to VAT for HMRC before I pay corporation tax at 20%, employers NI/Paye, accountants fees, insurance.
On the Contractor UK website it says:
In terms of your ability to maximise your income, forming a limited company is the most attractive option, allowing you typically to take home over 80% of what you earn; this compares favourably with umbrella services where you will expect to take home approximately 65% of your earnings.
Am I missing something really obvious here that I should/should not be doing?
My first contract was through an umbrella company. I never got less than 63% of the day rate with nothing else then to pay out.
I looked at the limited company or umbrella comparisons and decided to go with the limited company and register for the flat rate scheme in the belief I would be better off.
It appears I'm paying 20% of my sales invoices to VAT for HMRC before I pay corporation tax at 20%, employers NI/Paye, accountants fees, insurance.
On the Contractor UK website it says:
In terms of your ability to maximise your income, forming a limited company is the most attractive option, allowing you typically to take home over 80% of what you earn; this compares favourably with umbrella services where you will expect to take home approximately 65% of your earnings.
Am I missing something really obvious here that I should/should not be doing?
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