Umbrella Company Options
UK Contractors are looking more and more at umbrella company options that allow them to keep more of their money.
So, what type of company can help them to do this?
Firstly, there are the standard PAYE Umbrella Companies. They manage to get contractors, that IR35 catches, some extra expenses that they can claim against tax.
There are also UK Contractors who want to concentrate on their contracting careers. They do not want to do all the admin, like book-keeping and VAT returns as well as invoicing.
They tend to go for PAYE Umbrella Companies too.
However, they do pay an average of around £10,000 a year more in tax than Limited Company contractors.
Efficient Tax Planning
So, many contractors don’t want to do the admin and want high returns. They are looking, more and more, at efficient tax planning to increase their take home pay.
Using these umbrella company options, they can retain anywhere between 75% and 90% of the money they earn.
Examples of such are SafePay, Tower Resources, Sunflower Umbrella Company, BestPay and Tax Solutions.
To find some of these umbrella company options you should click on Umbrella Company Directory
Limited Company Tax Planning Solutions
There are other Tax Planning schemes which allow freelancers to continue to use their own Limited Companies rather than transferring to an Umbrella Company.
Often agencies, who get contractors work, insist that contractors, who want to go down the Umbrella Company route, use one of the Umbrella Companies on their Preferred Suppliers List.
It is actually illegal, under the 2010 Bribery Act, for agencies to induce contractors to choose Umbrella Companies this way. However, they do it. The suspicion is that they are getting bribes from the Umbrella Company proprietors for doing this.
Using a Tax Planning scheme that allows contractors to continue to use their Limited Companies means that this is not a problem. Contractors simply tell the agencies that they are operating through a Limited Company. The rest is invisible to them.