AWOL Posted September 4, 2012 Share Posted September 4, 2012 I have always been employed PAYE, but now have reached the stage in life where I want more time off work than companies allow. I have been approached by an employment agency who have asked me to take on a contract. They tell me that I should either set myself up as a limited company or get an "umbrella company" to sort out my financial affairs and it would cost me about £25 per week. Does anyone have any advice? Would it be better to stay PAYE? Would I be better off using an umbrella company? Link to comment Share on other sites More sharing options...
Leah-Lacie Posted September 4, 2012 Share Posted September 4, 2012 I have always been employed PAYE, but now have reached the stage in life where I want more time off work than companies allow. I have been approached by an employment agency who have asked me to take on a contract. They tell me that I should either set myself up as a limited company or get an "umbrella company" to sort out my financial affairs and it would cost me about £25 per week. Does anyone have any advice? Would it be better to stay PAYE? Would I be better off using an umbrella company? Does the agency belong to Kyle whos never at his desk? Posted from Sheffieldforum.co.uk App for Android Link to comment Share on other sites More sharing options...
AWOL Posted September 4, 2012 Author Share Posted September 4, 2012 Does the agency belong to Kyle whos never at his desk? Posted from Sheffieldforum.co.uk App for Android NOOOOOOOO....certainly not!:hihi: I am an engineer. They are an engineering recruitment agency. Link to comment Share on other sites More sharing options...
JackLakeland Posted September 4, 2012 Share Posted September 4, 2012 I did this for about 15 years some time with an Umbrella and sometimes as a Ltd Company. If I was you, I'd set up as a Ltd. You'll have to register for VAT though but its not hard. A form and a phone call. I did my VAT on a standard rate. I think I had to pay 12% while I charged 17.5% so I made a killing on that. About 40 quid a week for doing nowt...You'll need an accountant but you can pay for the service monthly, mine was about 30 quid I think, but its a few years ago. If you use an Umbrella you don't have to do owt. Just fax your hours and expenses to them then they invoice the Agency and then pay you. I think you should get about 2 quid an hour more from the Agency on PAYE rates (for both methods) because they have nothing to do, just pay the invoice either you or the Umbrella send... You'll lose the holiday pay though, the Agency pays you...But, if Ltd, you can pay yourself for Bank Holidays and sick pay because it all comes out of the company..you will still get holiday pay though, if Ltd, that comes out of the company too. There's been a lot of publicity just lately about all this so I'm not up to date with any changes to legislation though... Link to comment Share on other sites More sharing options...
neeeeeeeeeek Posted September 4, 2012 Share Posted September 4, 2012 I did bits of contracting. Umbrellas are good if you work full time, most charge you a weekly fee, so only doing a couple of days is a killer. You can claim travel expenses and a fiver for lunch (well, the VAT back) so you can pull quite a bit of the charges back that way. It's the easy option, and I never had a problem. I used Eden for a while, and they were good. They also had a day rate if you were not working much. Trouble I had was Hayes kept offering me bit of work here and there, but they had a list of preferred umbrella companies, none of which would charge for individual days. Eden also gave a bigger discount with which ever agency it was I got the work through as they a load of people from them. Check see if the agency have a specific list you can use, they might have preferred rates. Limited is probably better if you can be arsed and plan to do if for a fair amount of time. You need to spend time doing it all though, so way it up. Link to comment Share on other sites More sharing options...
AWOL Posted September 4, 2012 Author Share Posted September 4, 2012 I did bits of contracting. Umbrellas are good if you work full time, most charge you a weekly fee, so only doing a couple of days is a killer. You can claim travel expenses and a fiver for lunch (well, the VAT back) so you can pull quite a bit of the charges back that way. It's the easy option, and I never had a problem. I used Eden for a while, and they were good. They also had a day rate if you were not working much. Trouble I had was Hayes kept offering me bit of work here and there, but they had a list of preferred umbrella companies, none of which would charge for individual days. Eden also gave a bigger discount with which ever agency it was I got the work through as they a load of people from them. Check see if the agency have a specific list you can use, they might have preferred rates. Limited is probably better if you can be arsed and plan to do if for a fair amount of time. You need to spend time doing it all though, so way it up. Thanks for your reply. If a contractor was on £1,000 per week and a PAYE person was on £1000 per week, who would get the most take home pay? Also do contractors get holiday pay? Link to comment Share on other sites More sharing options...
neeeeeeeeeek Posted September 4, 2012 Share Posted September 4, 2012 Getting a bit complicated for me that! You pay the same tax, but as a contractor you can claim more back as you are technically self employed. It doesn't generally work that way though, (your 1000quid example) you usually get offered a slightly higher rate to be self employed / contract / umbrella, which when working full time, and with an good umbrella company, should leave you better off. Link to comment Share on other sites More sharing options...
JackLakeland Posted September 4, 2012 Share Posted September 4, 2012 As a Ltd company you'd pay income tax on your salary....You'll have to pay corporation tax on any profit the company makes. Link to comment Share on other sites More sharing options...
taxman Posted September 4, 2012 Share Posted September 4, 2012 Also do contractors get holiday pay? Do you pay your window cleaner holiday pay? Link to comment Share on other sites More sharing options...
AWOL Posted September 4, 2012 Author Share Posted September 4, 2012 Do you pay your window cleaner holiday pay? I am not going window cleaning. Link to comment Share on other sites More sharing options...
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