Limited vs Umbrella?

Junglist · 12 May 2016 at 12:46

Brains of OC, I wonder if anyone can help with some advice?

I'm an IT Engineer 1/2nd line. I've always just worked for a company so never had to look into this. I recently started a contract role (7 years) and I joined an umbrella company to handle everything. Which was fine until I realised how much money they deduct. Most of the guys in my team are all part of a Limited company which they say saves them a big amount on tax.

I've tried to contact a Contractors Accountant to get some more advice but I'm just wondering if there are any of you out there who have been in the same situation as me and made the switch from an umbrella to a limited or the other way around?

BigT · 12 May 2016 at 16:29

I doubt you'll find anyone who has switched from a limited to an umbrella, but probably a fair few who've done it the other way when they see how much their earnings get eaten into.

Your research has already led you to the right answer for the right reasons. Find a good contract accountant - perhaps one of your mates must know a good one. Get their advice and keep more of your money.

I don't know anyone who didn't go for a ltd company over an umberella unless there were some extenuating circumstances like speed to get going or legal/financial/marital implications that prevented it.

Junglist · 13 May 2016 at 10:07

Seems like that is the best route for me to go. Daunting stuff but will be worth it

jimjamuk · 13 May 2016 at 10:13

start umbrella to get yourself going. once you have everything set up and settled into the new role - start a LTD and move to that. I does mean you have to do quite a bit of reading and find a decent accountant.