Contract Work Pay (PAYE/Umbrella/PLC)

Harold_Wren

agrinnall wrote: »

What might be more useful is if the OP told us how much they are earning, as the proportional costs of a limited company on a low rate may make it an uneconomic option.

I currently earn £20 an hour as a PAYE temp with holiday pay/pension pay added separately which is worth around three pounds an hour, I believe the pay to an umbrella company/Ltd company would be £23.18 an hour. My workmate who receives the same rate of pay from the original company but is currently working under an umbrella company receives just under £20 an hour all in. The accountant I've been in touch with has quoted around £700-800 to do the company returns.

As I understand the changes in April will mean that those who draw the minimum income through their Ltd company and draw a dividend will now be taxed higher on the dividend? At the moment I pay the standard rate of tax and I'm not looking at the Ltd company option to reduce my tax bill, I'm just trying to minimise the loss in changing from a temp as going to an umbrella company is going to lose me a few pounds per hour.