New to Contracting

If you intend to contract for the medium to long-term, trading as a Limited Company is the best option. Running a Limited Company provides a host of benefits compared to any other trading option, and will increase personal wealth in virtually all circumstances.

The benefits of contracting via a Limited Company include:

  • The highest possible earnings from the contract, potentially 20% more than Umbrella / PAYE options
  • The flexibility to grow and change the contracting business, for example by employing others or outsourcing tasks to other companies
  • The ability to adopt planning strategies to achieve personal financial goals
  • Full control of the income you generate

What will I earn

  • Providing your services via a Limited Company offers tremendous opportunity to plan your income, and build towards your long-term objectives. Consequently, it is not  realistic to compare a net monthly return to a managed solution such as an Umbrella
  • Nonetheless, select your rate below and get a broad idea of how a Limited Company compares to an Umbrella in terms of net return

 

1st Option

Net Pay Calculator

Do you want to know what your yield from your contract could be?

The earnings calculator below can give you an idea of the potential yields that you might achieve from your contracts. Simply input the daily rate into the scale for a quick and easy comparison - based upon our assumptions (see below). Bespoke advice is available by clicking Contact Us .

£500
Daily Rate
Min £150
Max £2,500
Results
£K
Ltd Co (IR35 Pass)
£K
Ltd Co (IR35 Fail)
£K
Umbrella
£K
PAYE
These figures are for illustration purposes only and are based on estimated figures for the 2016/2017 tax year. They make various assumptions (which have been consistently applied) about expenses claimed, days and weeks worked, declared salary and level of pension contributions including:

  • A salary of 35% of daily rate or £24, 000, whichever is the lower
  • A pension contribution of 12% of turnover
  • Travel expenses of £150 per week
  • Other expenses of £5, 900 per year (including Accountancy fees of £2160)
  • Application of the VAT Flat Rate Scheme at the IT Contractor rate
  • No allowance has been made for Income Sharing
  • The calculator can only be used for daily rates above £150

IR35 status is a consideration for each separate assignment and professional advice should always be obtained.

What will I have to do?

Providing services via a Limited Company will mean you have three main jobs…

Manage Your Working Hours/Days

Depending on the terms of your engagement you must manage the time sheet completion, or record the time that you offer services or the deliverables that you achieve. We can offer help with our invoicing service.

Collect Your Expense Receipts

You will need to collect receipts and let us have details of the expense claims that you wish to make. We will be there to advise you on expense claims and make sure that you remain compliant, with accurate records.

Manage the Company's Bank Account

The management of the company’s bank account will always be your responsibility. Although we will be there to advise you on your salary and general running of your company, you retain full control of the company funds. Your company bank account will probably come with a cheque book for making payments although most of our clients make payments online, as well as setting up direct debit facilities with most government collection bodies.

Why do I need an accountant?

Operating via a Limited Company requires statutory documents to be filed annually. These documents will need to be filed by a Chartered Accountant.

You may also find the experience and advice our Accountants can offer will not only ensure tax efficiency, it will also relieve any administrative burdens.

Working with 1st Option will ensure you gain the maximum return, with minimal paperwork, in a completely compliant manner, all for a fixed, competitive fee.

Fill in your details below and a member of our team will be in touch
Close Form Call me back