Umbrella companies for contractors

[glitch]

How many people on here use an umbrella company for their contracting work? I've been offered a job where I'll need to either go through the process of setting up my own limited company or going through an umbrella company who will do all the leg/paperwork for me.

Thing is, would it really be all that difficult for me to do everything rather than pay someone in the region of £30 a week to do it for me? Are there any potential problems with either route?

If anyone has any experiences or comments they'd like to share, I'd love to hear them.

 

[Skip]

I used Paystream2000 as they're a smaller company (based in Warrington I think). I use them to help manage my own Ltd company (a more tax efficent way of working as long as you fit the IR35 criteria) but they also provide umbrella services. I've also heard (fairly) good things about 'Parasol' and 'Giant' but obviously no personal experience to back it up.

edit: Just re-read your post and thought I'd add some more info instead of rushing a reply and going to get myself another glad of wine. Call it my selfless dead for the day! Basically it all depends on how much you're earning...the general feeling is that for anything over £200 a day its worth setting yourself up as a Ltd company because of the tax savings you will make, provided you meet IR35 (you have to be performing a role that could not otherwise be done by an employee ie. you can provide your own equipment, don't get paid for holidays, have to complete any defective work in your own time etc). Your umbrella company will manage this for you as the secretary of your company, so all you do is sign a few forms and fill in your annual tax return (which they help you with). The straight umbrella company route is probably less hassle overall, but you'll be paying more tax and therefore, depending on whether you'll hit to 40% tax bracket or not, you might end up feeling shortchanged. Bear in mind though that if you have a ltd company and go over the 40% tax, you'll also need to save some money for making up the difference at the end of the tax year.