Umbrella Company V's Limited Company solution
1. A properly structured limited company solution will always produce a better and maximized financial outcome than any UK umbrella company solution.
The recognised exceptions to the above rule are:
· The anticipated contract career is a contract of 6 months or less
· The contract falls within the IR35 rules
· The contract value is low; less than £30,000 pa
2. The exceptions do not always prove correct. The circumstances for each individual contract and freelance contractor vary and the only way to ascertain the best route financially is to run the numbers. There are instances where a contract inside IR35 can be run through a limited company solution and because of the tax planning opportunities; the beneficial outcome exceeds that of an umbrella company solution.
An indication of the best solution is to compare outcomes by way of a financial illustration from each solution provider. The illustrations are not definitive as they are based on assumptions of the facts provided eg hours worked, expenses incurred, tax rules and rates in force.
Call 0800 7710078 for a telephone consultation and personal illustration.