Umbrella Scheme Vs Public Ltd Company

JimW75

Hello all
Have been offered a new job through a locum health care agency, but with guaranteed full time hours. The employers have given me 3 options for pay:
they pay me directly as an employer
they pay me via an umbrella company
i set up as a public ltd company and they pay me

Any suggestions on what to do - my job will involve expenses ie travel, overnight accomodation

Have read a bit around umbrella companys and setting up as a public ltd company (that needs you to have an accountant) - am kind of swaying for the latter option but what are the +ve and -ve of both?
Any advice much welcomed!! :beer:

LittleVoice

JimW75 wrote: »

Hello all
Have been offered a new job through a locum health care agency, but with guaranteed full time hours. The employers have given me 3 options for pay:
they pay me directly as an employer
they pay me via an umbrella company
i set up as a public ltd company and they pay me

Any suggestions on what to do - my job will involve expenses ie travel, overnight accomodation

Have read a bit around umbrella companys and setting up as a public ltd company (that needs you to have an accountant) - am kind of swaying for the latter option but what are the +ve and -ve of both?
Any advice much welcomed!! :beer:

Why a public limited company (PLC) rather than a private limited company (Ltd)? You would need more capital for the former for a start.

PlutoinCapricorn

In addition to the advice that I am sure you will soon get from MSE, I suggest Googling "umbrella versus limited company" and spend some hours digesting all that comes up so that you can make a considered, informed decision. Just to whet your appetite:

http://www.sjdaccountancy.com/about/ourservices/ltd_vs_umbrella.html

JimW75

LittleVoice wrote: »

Why a public limited company (PLC) rather than a private limited company (Ltd)? You would need more capital for the former for a start.

My mistake - it is private Ltd Co - thanks :j

KiKi

Will you be in the 40% pay bracket?

JimW75

Yes I will be

KiKi

It's probably better to go limited company then, esp if you're quite far into the 40% bracket.

Employed: you get unfair employment protection, and unfair dismissal protection after two years. Paid leave, paid sick leave, poss company pension etc.

Umbrella company: you're effectively operating as an associate through a limited company who employs you. You do get holiday but it's included in your pay. You don't have employment protection, and are relying upon the umbrella company to do your tax, expenses etc, but you can claim expenses to offset against tax. You also pay for the service.

Limited company: self employed and with no protection - but you can pay corporation tax, take min wage and dividends and not pay 40% tax. Make sure you claim all your expenses from the company for the work travel and accommodation. But in addition you can put any other self employed expenses on there, such as subsistence, claiming on anything required specifically for work, or a proportion of which is used for work (eg, laptop or office at home). You need to charge more than an employed salary to take account of the lack of job security and the lack of paid leave.

Personally, as I'm not fussed about employment protection, I'd go with a limited company. Keep everything in order, and your accountant will hardly need to do anything anyway. Keep all your receipts, all your invoices. Record them all on a spreadsheet and your accountant will love you. S/he can also advise on the things you can claim for, probably saving you money in the long term. And - I'm pretty sure I'm right to say this - you don't *have* to have an accountant, as long as you're happy completing your accounts for submitting to Companies House.

HTH

KiKi

axomoxia

Check your IR35 status _before_ you decide to go down the limited company + dividends route.

KiKi

axomoxia wrote: »

Check your IR35 status _before_ you decide to go down the limited company + dividends route.

Good point...

InsideInsurance

Speak to an accountant who specialises in contractors in your area of work, most will give 1/2 an hour for free.

IR35 is a big thing, if you are outside of it then ltd will give you by far the most take home pay but you are never absolutely certain you are outside until HMRC decides to investigate you.

As a business contractor then even if I was inside of IR35 I would still be better off as a Ltd because of the VAT profit etc but it is much closer call and some would say it isnt worth the hassle -v- an umbrella.

The concern is that you are being given the option which starts to smell bad to HMRC and means your potentially more likely inside IR35

I exclude the dodgy offshore umbrellas and other schemes who, if they work, stay viable and dont run off with your money will give you by far the most money but your then constantly looking over your shoulder, can get irregular payments etc

paddyrg

Also, remember as a ltd company, annual company and tax returns are a bigger deal than as an employee of an umbrella company.

That said, if you're servicing multiple clients at any time and really do not act as if employed by a single employer, ltd has other attractions.