Newbie question Ltd vrs Umbrella

**malvolio** · 31 August 2005, 08:50

Let's put it this way - the Limited Company and the Umbrella are subject to the same tax laws as each other and have the same employee taxation, dividend payment and expense regulations to adhere to. You also have to pay the Umbrella extra money to run your bit of the business.

If the Umbrella is managing to deliver more net cash than the Limited Company, does it not rather imply that someone somewhere is not meeting all the rules. And since it is you who are the taxpayer, who do you suppose will get hit with the corrective tax bill at some point in the future? And why do you suppose the regulations concerning tax avoidance schemes - which is what some umbrellas are, in effect - were made retrospectively enforceable at the last budget?

**Yamsy** · 31 August 2005, 09:09

Well it is dependent as well on the umbrella that you are using as well. Some of them e.g. Prosperity 4 will tell you, you can claim for food, mileage and hotel accomodation without needing to provide receipts, and they pretty much tell you to do that as they have a dispensation for this, like they did for me when they were touting for my business with the 400 phone calls they hit me with. This is where you have to be careful as should "Hector" come knocking on your door and open up an investigation then he will be finding all kind of holes in your expenses, and then kindly hitting you with a massive Tax Bill at the end of the year.

I use a very good Umbrella, and I was not easily converted having my own Ltd Co for many years. They have advised me even though they have a food dispensaton that if I leave after a certain time I SHOULD NOT be claiming for e.g. breakfast or dinner, and everything else they ask me to provide a receipt for. In effect this is for my own protection more then anything else, as none of us can be assured that we will not get investigated, but should this happen, it is vitally important that you are above board and doing everything correctly, and they will be able to see this.

All my tax issues are dealt with, I have a specific account manager who looks after me and they charge me £11 a week to do this, which does not even equate to 30mins pay.

Just beware so many of these Umbrella's out there will promise to give you the highest take home, but you also need to make sure that you are with an umbrella who also has your best interests at heart, of which there were 2 out of the millions of them now, when I did my investigations.

Happy hunting my friend.

**malvolio** · 31 August 2005, 09:30

All my tax issues are dealt with, I have a specific account manager who looks after me and they charge me £11 a week to do this, which does not even equate to 30mins pay.

Hmmm... So are mine. I don't need an account manager. I set my own rules over expenses. I pay rather less than 15 minutes pay a week.

**roffster** · 31 August 2005, 11:36

Thanks for the great comments.....I think contracting is definately for me and I think if Im going to be doing it long term "Hector" will probably come looking eventually so these get "rich quick schemes" are probably a bad idea (well for me anyway....the umbrella companies must be laughing all the way to the bank)

Can anyone recommend a good accountant in London to help me with a Ltd company?

thanks again

**partimer** · 31 August 2005, 12:36

Brolly v Ltd

The Brolly v Ltd is very polarised as you can see from the discussion already. Generally, if you're inside IR35 and plan on being a bum on seat individual then go Brolly.
If you want to run a genuine business and that means being outside IR35 then go Ltd.

If you are resting on the bench, you tend to leave the Brolly i.e. you don't pay them (assuming you sign up with a good Brolly). The accountant will charge you regardless as you are never "resting" if you run a business. Brollies and Ltd have their place, depending on your individual circumstances.

As I said, this is a generalisation.

**Mailman** · 31 August 2005, 18:42

Go with a limited company because at the end of the day you are the ones calling the shots. You arent going to be given excuses for why your expenses arent being paid, you arent going to be given excuses for why you arent being paid fullstop, you arent going to get run around by dodgy admin staff....the list goes on.

Dont be a disguised employee...be a contractor with your own limited company where you actually call the shots!

Mailman

**Adrian Murphy** · 1 September 2005, 18:46

Mailman

Mailman's points about going Limited certainly make sense.

My situation is a little different. I have a Limited company and I listed

at Companies House as a director. The accounts however, including the

bank account are however managed by the accountancy firm ( Churchill Knight

and Associates - CKA ). The managing partner of CKA is listed as our

Company Secretary, so has the relevant permission to run the Company.

I have to put a fair amount of expenses through my company as I tend

to have to spend quite a bit of time out of the country. Have to say my

accountants follow my instructions and all my expenses ( including laptops

/ flights / entertainment ) go through without an issue. Accountants charge

£100 pm and for what they do, this amount is worth every penny.

Being fortunate enough to be in a 6 figured annual contract, I certainly

would not be working this way if it wasn't the best approach.

Check them out for yourselves.

Newbie question Ltd vrs Umbrella