We get many new freelancer or contractor clients who’ve had a bad experience with umbrella companies and who are looking for a better way of managing their business affairs.
Just to be clear, an umbrella company is a company that acts as a pseudo employer for freelancers and contractors. In theory, it’s more straightforward – like having a job with no further tax to pay which minimises paperwork and hassle – but unfortunately, there are major downsides with umbrella companies:
- You lose control over your financial affairs – which means you risk others handling (or losing) your money and potential delay in being paid.
- Using your own company is a lot more flexible enabling a much better tax minimisation strategy. You’ll definitely take home a lot more of your hard-earned money.
- Because the umbrella company is doing all the administration their charges can be significant.
Now umbrella companies will tell you that operating your own limited company is just too difficult and you’ll end up trapped in a minefield of tax you don’t understand and get bogged down in endless administration, but in fact it’s easy and cheaper than you think – providing you choose the right accountants who will take care of everything for you (except perhaps your invoicing).
So, assuming your income is at least £35,000 a year, speak to us (without obligation or cost) about how we can make it easy for you to operate your own limited company.