subject: Can a self-employed worker afford not to use an umbrella company? [print this page] Author: Ronald Kresten Author: Ronald Kresten
An umbrella company is one of the most effective ways that freelancers, contractors, temporary workers and anyone who is self-employed can get the most from their take home pay and enjoy the freedom that being self-employed brings.
Most self employed people are aware of the limitations to their earning potential should they set up as a partnership, sole trader, partnership or starting as a limited company. For many freelancers it is a far more attractive proposition financially to stay self-employed and use the services of an umbrella company to avoid paying extortionate levels of tax.
With an umbrella company a self-employed person wont need to raise invoices, process expenses, calculating tax and NI, deal with legal contracts, collect payments or deal with any other necessary business regulations.
There are different types of umbrella companies which provide different benefits; there are those that are managed companies offering the chance to claim holiday and sick pay. Composite companies provide a freelancer the ability to be a shareholder of their umbrella company thus the chance to reduce tax and NI liabilities and there are umbrella companies that provide both these benefits to a freelancer. Other benefits in setting up as an umbrella company include: private healthcare, pension schemes, life and illness insurance, public liability insurance.
An umbrella company which operates under HMRC terms can give all the tax benefits associated with a limited company and a dispensation provided for tools and expenses covering more complicated issues like the IR35 (umbrella companies are formed to provide a workers services to a client company so the client is able to pay the company directly without needing to deduct PAYE or NI).
At Churchill Knight & Associates Ltd we are industry experts who have been providing specialist accounting services for more than a dozen years to thousands of freelancers. Our experience and expertise can benefit you. The Article is written by churchill-knight.co.uk providing Umbrella Company and Limited Companies Services. Visit http://www.churchill-knight.co.uk for more information on churchill-knight.co.uk Products & Services___________________________Copyright information This article is free for reproduction but must be reproduced in its entirety, including live links & this copyright statement must be included. Visit churchill-knight.co.uk for more services!About the Author:
