Umbrella or LTD for Agency Contract?

LU861012970T

Evening all.

I’m due to commence a role that pays £990 per week (30 hours). The Agency have today told me that I can’t be PAYE via them, I need to either use an Umbrella or a LTD company.

Contract is within IR35.

Compliant Umbrella costs £15 per week plus £89 ‘employment costs’ which i think is employer NI contributions. Holiday fund accrual of £95.

Taxable pay is then £790, Employees NI is £44, Tax is £110 leaving a Net Pay of £637.  Or I can take holiday pay upfront and come out with £697.

Would or make more sense to open a LTD company? Assignment rate won’t change though. I haven’t contracted in years but when I did the LTD company rate used to be higher.

Grumpy_chap

LU861012970T said:

Evening all.

I’m due to commence a role that pays £990 per week (30 hours). The Agency have today told me that I can’t be PAYE via them, I need to either use an Umbrella or a LTD company.

Contract is within IR35.

Compliant Umbrella costs £15 per week plus £89 ‘employment costs’ which i think is employer NI contributions. Holiday fund accrual of £95.

Taxable pay is then £790, Employees NI is £44, Tax is £110 leaving a Net Pay of £637.  Or I can take holiday pay upfront and come out with £697.

Would or make more sense to open a LTD company? Assignment rate won’t change though. I haven’t contracted in years but when I did the LTD company rate used to be higher.

If the Contract is Inside-IR35, the decision is an easy one.
Umbrella Company.

Own Ltd Co. for inside-IR35 contract is a non-starter and you will end up with far less take home than via UC.

The only real tax efficiency available is to make as much as you can as employer pension contributions (by the UC) which builds funds for the future but is less take home now.