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Umbrella or Umbrella + Self Employment?
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![[Deleted User]](https://us-noi.v-cdn.net/6031891/uploads/defaultavatar/nFA7H6UNOO0N5.jpg)
[Deleted User]
Posts: 0 Newbie

in Cutting tax
Hi there,
I was wondering whether somebody would be able to advise me?
I work three days a week as a contractor, and get paid through an Umbrella company who act as the intermediary between me and my employer. Out of my wages the Umbrella company pay my tax, national insurance, pension, student loan etc. and then as any other employed person, I receive my take home pay.
For the other two days I am thinking of setting up for myself, and I need to get a few things organised before I jump in. Mainly, I am wondering whether I would be better avoiding the administration and paying the umbrella company my gross income and then they can take out all of the correct taxes from my income - the Umbrella have agreed to work in this capacity for me, but it is an 'unusual' arrangement as far as I can tell, and I will end up paying for their services - but the upside is I don’t have to deal with my taxes.
Or whether I should register as Self Employed (not as a Limited Company) and do my own self assessment?
If there was a financial benefit I would consider doing it, but for two days per week I'm wondering if it is worth it?
At present they charge approx 4.5% of my pre-tax earnings for this service.
Thanks
I was wondering whether somebody would be able to advise me?
I work three days a week as a contractor, and get paid through an Umbrella company who act as the intermediary between me and my employer. Out of my wages the Umbrella company pay my tax, national insurance, pension, student loan etc. and then as any other employed person, I receive my take home pay.
For the other two days I am thinking of setting up for myself, and I need to get a few things organised before I jump in. Mainly, I am wondering whether I would be better avoiding the administration and paying the umbrella company my gross income and then they can take out all of the correct taxes from my income - the Umbrella have agreed to work in this capacity for me, but it is an 'unusual' arrangement as far as I can tell, and I will end up paying for their services - but the upside is I don’t have to deal with my taxes.
Or whether I should register as Self Employed (not as a Limited Company) and do my own self assessment?
If there was a financial benefit I would consider doing it, but for two days per week I'm wondering if it is worth it?
At present they charge approx 4.5% of my pre-tax earnings for this service.
Thanks

0
Comments
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get an accountant to discuss through the pros and cons of limited company and sole trader. umbrella companies are not needed in this day and age, cut out the middle man"It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
G_M/ Bowlhead99 RIP0 -
get an accountant to discuss through the pros and cons of limited company and sole trader. umbrella companies are not needed in this day and age, cut out the middle man
I agree. Umbrella companies charge just as much as an accountant, so it makes sense to do it yourself with accountant support to get the benefits, i.e. more expenses claimable, more flexibility with withdrawals, and most importantly, being in control.
Caveat - unless it's a very short term thing, such as just a few months where accountancy charges would probably be more due to setting up and closing down time.0
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