Umbrella VS Ltd company help!

kkhimji2001
kkhimji2001 Posts: 86 Forumite
in Cutting tax
Hi people ,

I have just got my first job as a contractor on £190/day up till June 2018. I am not sure if I will contract in the future it depends if I find a full time job. I was wondering if its worth setting up a limited company for now or go umbrella and if so what is the rough difference in take home pay per month?

I have joined an umbrella company already but having looked at how much colleagues are making with limited each month, it seems like a there is a MASSIVE difference in take home pay, is this true? And if I have joined an umbrella company can I set up a limited company and switch whilst on my contract?

Many thanks
«1

Comments

  • 00ec25
    00ec25 Posts: 9,123 Forumite
    Combo Breaker First Post
    use the search function, your question has been asked many times already in one form or another. here are 4 to get you started:

    http://forums.moneysavingexpert.com/showthread.php?t=5662732&highlight=umbrella+ltd

    http://forums.moneysavingexpert.com/showthread.php?t=5044741&highlight=umbrella+ltd

    http://forums.moneysavingexpert.com/showthread.php?t=4916615&highlight=umbrella+ltd

    http://forums.moneysavingexpert.com/showthread.php?t=4779551&highlight=umbrella+ltd
  • kkhimji2001
    kkhimji2001 Posts: 86 Forumite
    does anyone know if I can leave an umbrella company immediately
  • 00ec25
    00ec25 Posts: 9,123 Forumite
    Combo Breaker First Post
    edited 22 November 2017 at 1:11AM
    kkhimji2001 wrote: »
    does anyone know if I can leave an umbrella company immediately
    read the contract you signed with them, it will/may have a notice period

    http://lmgtfy.com/?q=when+can+i+leave+an+umbrella+company

    http://forums.contractoruk.com/umbrella-companies/69262-terminating-service-my-umbrella-company.html
  • kkhimji2001
    kkhimji2001 Posts: 86 Forumite
    5 Duration and Notice
    5.1 lf the Employee wishes to terminate his employment, the
    Employee must give the Employer one months' written notice.
    The Employer must give the Employee notice in accordance
    with the current statutory minimum period of notice to
    terminate the Employee's employment.
    5.2 Further to clause 2.10, when the Employee is not on an
    Assignment, the Employee is obliged to contact the Employer
    each and every Monday by 12pm to notify the Employer of his
    availability to undertake further Assignments. In the event that
    the Employee fails to contact the Employer for any continuous
    period of four weeks following the end of the Employee's last
    Assignment, the Employee expressly agrees that the Employer
    may choose to treat this as the Employee's resignation from
    this employment with immediate effect

    2.3 The Employee is obliged to complete any Assignment which is
    offered to and accepted by the Employee. If the Employee
    leaves an assignment within the first 20 working days from the
    start of the Assignment, the Employee agrees to reimburse the
    Employer in respect of any losses suffered by the Employer (up
    to a maximum of 50% of the fees paid in respect of the days
    worked on that Assignment). After the initial 20 working days,
    the Employee may terminate an Assignment on 20 working
    days notice. Termination of an Assignment is not termination
    of the Employee's employment by the Employer or by the
    Employee and does not affect the continuity of the Employee's
    employment.

    I am not good with contracts, is it mentioned here?
  • 00ec25
    00ec25 Posts: 9,123 Forumite
    Combo Breaker First Post
    edited 29 November 2017 at 2:22AM
    kkhimji2001 wrote: »
    I am not good with contracts, is it mentioned here?
    yes it is explained there

    if you do not understand what you have quoted then how do you expect to be able to run your own Ltd Company?
    kkhimji2001 wrote: »
    5 Duration and Notice
    5.1 lf the Employee wishes to terminate his employment, the
    Employee must give the Employer one months' written notice.
    The Employer must give the Employee notice in accordance
    with the current statutory minimum period of notice to
    terminate the Employee's employment.
    5.2 Further to clause 2.10, when the Employee is not on an
    Assignment, the Employee is obliged to contact the Employer
    each and every Monday by 12pm to notify the Employer of his
    availability to undertake further Assignments. In the event that
    the Employee fails to contact the Employer for any continuous
    period of four weeks following the end of the Employee's last
    Assignment, the Employee expressly agrees that the Employer
    may choose to treat this as the Employee's resignation from
    this employment with immediate effect

    2.3 The Employee is obliged to complete any Assignment which is
    offered to and accepted by the Employee. If the Employee
    leaves an assignment within the first 20 working days from the
    start of the Assignment, the Employee agrees to reimburse the
    Employer in respect of any losses suffered by the Employer (up
    to a maximum of 50% of the fees paid in respect of the days
    worked on that Assignment). After the initial 20 working days,
    the Employee may terminate an Assignment on 20 working
    days notice. Termination of an Assignment is not termination
    of the Employee's employment by the Employer or by the
    Employee and does not affect the continuity of the Employee's
    employment.
  • Potbellypig
    Potbellypig Posts: 775 Forumite
    First Anniversary Name Dropper First Post
    I'd probably stick to the Umbrella company, if I was you.
  • TheCyclingProgrammer
    TheCyclingProgrammer Posts: 3,702 Forumite
    First Anniversary First Post Photogenic
    I'd also stick with the umbrella, considering the value of the contract and the fact that you don't even know if you'll continue to contract afterwards.
  • Sarastro
    Sarastro Posts: 400 Forumite
    Not really worth it unless you are going to do more contracting in the future.
    Debt 1/1/17 - Credit Cards £17,280.23; overdrafts £3,777.24
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  • dori2o
    dori2o Posts: 8,150 Forumite
    First Anniversary First Post
    One thing to possibly consider is the amount of travelling you do.

    By going via the Umbrella company route you are restricted in what you can claim as travel costs for expenses. There was quite a large rule change in April 2016 for employees of employment subsiduaries.

    Under the umbrella company you are essentially classed as an employee of that company, therefore any travel to the site you work at will be considered to be commutting to a permanent workplace and therefore not an allowable expense.

    This has caught out many people who had previously been able to claim expenses for commuting and now find themselves at a disadvantage.
    [SIZE=-1]To equate judgement and wisdom with occupation is at best . . . insulting.
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  • Pennywise
    Pennywise Posts: 13,468 Forumite
    Name Dropper First Post First Anniversary
    dori2o wrote: »
    One thing to possibly consider is the amount of travelling you do.

    By going via the Umbrella company route you are restricted in what you can claim as travel costs for expenses. There was quite a large rule change in April 2016 for employees of employment subsiduaries.

    There's also the "control and direction" rule which may prohibit travel costs allowability even if you use your own limited company. (Not to mention whether IR35 applies or not). So, these days, no guarantee that travel would be allowable either way.
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