Umbrella companies

Hammyman

Keeping books is not hard. Sending out invoices is not hard. If you've got a tidy set of books and receipts in order, an accountant will do them for around £250 which is a damed sight less than the umbrella companies charge.

And whilst you do get more per hour, typically in the field I was in it was an extra £1 which came nowhere near covering holiday pay and employers NI.

terra_ferma

I agree that umbrella companies can be a rip off, a few years ago when they were a novelty I got ripped off by the agency who told me I would get more money through umbrella than paye (they probably got commission for referring customers). I was naive then...

The way I see it is that if the OP plans to do contracting in the long term ltd is the way to go.

However there is a market where an umbrella can have its place, some people take on agency work in the short term, while looking for permanent work, or because of other commitments.

In this case if the rate works out right they may be better off with an umbrella.
There are both salary and umbrella rates calculators online that can help people make their mind up.

Personally I would not trust any company that got an employee to advertise their services in a forum, without authorisation from MSE.
They market their services and you only hear one option.
(although Ste has been quite honest about it, which is a good thing)

PasturesNew

Hammyman wrote: »

Keeping books is not hard. Sending out invoices is not hard. If you've got a tidy set of books and receipts in order, an accountant will do them for around £250 which is a damed sight less than the umbrella companies charge.

And whilst you do get more per hour, typically in the field I was in it was an extra £1 which came nowhere near covering holiday pay and employers NI.

Running a Ltd company is a bit more than invoices/receipts and some tidy books. There are further obligatory forms that need to be filled in, on time, and sent to Companies House ... and 'stuff' to do.

And when you stop, you can't just stop, you have a legal entity "a Ltd company" that needs to be closed down properly and formally, with Companies House being told and an advert in some newspaper in London (from memory). I had a firm of accountants that did it all for me - and they still c0cked it up, forgot to tick some box ... and I was hit by a £10k Corporation Tax bill I knew nothing about (and didn't owe) and there was a full HMRC investigation and it was about 3 years before I could close down the Ltd company .... and having a Ltd company means you can't go straight from working one week to on the dole the next (if your contract ends and there's no new one forthcoming).

When I was IT contracting, you could ONLY do the jobs if you worked as a Ltd company, meaning it was Ltd or umbrella or no job. These aren'1t/weren't jobs that "normal agencies" had on their books, these were contracting agencies who did not act as employers.

Umbrella = easier. FTW.