I have been contracting under my limited for several years. I still have a few clients where I will continue to invoice under the limited. However, I now have an opportunity for a contract that falls under IR35. They are offering the option of agency PAYE, umbrella, or use my limited. I've ruled out umbrella as I have an accountant that manages my limited. The question is... is the agency PAYE a better option as although the day rate is less, they offer paid holiday and pension contribution?
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If you've other income it sounds like you don't need all the money from the contract. Why not go with Contractor Umbrella who have a pension scheme that allows you to put the maximum allowance in a year rather than just the 6% that most do. If you don't need the money it's the most efficient use of it. If you can put it all in you'll pay virtually no tax even though it is inside IR35.'CUK forum personality of 2011 - Winner - Yes really!!!!
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Thank you for the suggestion. I didn't think it was worth using an umbrella since I have to pay my accountant anyway for my other contracts and it seemed silly to pay the umbrella fee. But, are you saying that it would actually be more beneficial than using my own limited?Originally posted by northernladuk View PostComment
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I don't think you'll be any better off working through your ltd rather than umbrella or paye and if you work through your ltd you'll have to wait longer to be paid, but you will keep control. Paying the max into a pension is an interesting option, but check out how long you'd need to leave it in to gain a tax advantage. Depends on how much income you need to live on I guess. I've worked inside and was shocked at the take home pay, employers NI, no expenses claimable and no benefits. At least you get some benefits on paye, not that I'm recommending it, best to stick to outside if you can, if not try to get 20% uplift to compensate.Comment
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