Do you earn a lot but chose to work through an umbrella?

[psychocandy]

Working next to a long time contractor here who switched to brolly when IR35 came because of the uncertainty, and has only just went back to a Ltd for this contract.

Another contractor I worked with a few years ago, when I asked him about how he deals with IR35, said he doesn't, just says he is caught on his return and still works through a Ltd.

LOL. Thats so funny. Why bother fighting IR35 - just own up to it anyway. Nice little earner for HMRC.

[Mose]

Yeah, I'm on a high rate and choose to run through an umbrella. There are many small reasons but the only one that matters is that the difference in income is less than I consider the additional work to be. I don't begrudge them their fees at all, I'm happy to pay it for the entirely stress free service.

[psychocandy]

Yeah, I'm on a high rate and choose to run through an umbrella. There are many small reasons but the only one that matters is that the difference in income is less than I consider the additional work to be. I don't begrudge them their fees at all, I'm happy to pay it for the entirely stress free service.

Hmmm. Are you sure that the difference in income is only a little less?

How much approx?

[Scoobos]

I know there has been a lot of threads on why a Ltd is better so not asking that but I'm interested in people who earn a lot but still choose to work through an umbrella company rather than go down the Ltd route.

I'm not a big earner contractor and know that most of my contracts would probably fall in IR35 and it would not make a huge difference to my earnings by going to a Ltd once weighed up with the extra responsibilty.

So does anyone here choose to work through an umbrella if you do why have you made that choice and what hourly/day rate are you roughly on?

+What Mose says.

Personally, depending on your day rate I'd argue that there are times when using an umbrella is a better option.

I spend a lot of time talking to accountants, keeping my accounts, invoices, vat etc. At one point I'd say if I factored in an hourly rate, compared to an umbrella who charges a reasonable amount ; im better off using an umbrella.

I have a friend who earns a massive amount more than me, uses Crunch and also pays much less tax (But tax avoidance is not a big driver for me and I don't pay min salary max dividend like he does)

(I do run a LTD at the moment)

[Brussels Slumdog]

Non UK Tax Resident with UK ltd company

Being a non UK Tax resident and working in another EU state has its complications so I prefer to use a brolly when I work in the UK

[Mose]

Hmmm. Are you sure that the difference in income is only a little less?

How much approx?

It’s probably a few grand a year. No real way of being accurate as running through a brolly is absolute whereas you can’t lock down a ltd co to a set retention figure so easily.

[stek]

It’s probably a few grand a year. No real way of being accurate as running through a brolly is absolute whereas you can’t lock down a ltd co to a set retention figure so easily.

Surely the difference will be approx. 12% - ie the ERNI?

[LisaContractorUmbrella]

Depends what motivates you - for some it's money but for others it's a hassle free life; if you fall into the second category then an umbrella company is ideal for you - we have many contractors working with us who earn in excess of £600 p.d. and stay with us for an easy life

[Wanderer]

It’s probably a few grand a year. No real way of being accurate as running through a brolly is absolute whereas you can’t lock down a ltd co to a set retention figure so easily.

If you are IR35 caught then yeah, you are right enough. If you are confident enough to declare yourself outside IR35 then you could take home about 25% extra or up to 40% extra if you have a spouse with no income.

Depends what motivates you - for some it's money but for others it's a hassle free life; if you fall into the second category then an umbrella company is ideal for you - we have many contractors working with us who earn in excess of £600 p.d. and stay with us for an easy life

Absolutely right. I did exactly that for a while after running a company for years.

Getting a P60 showing exactly how much tax I was paying jolted me out of my apathy and back to running a LTD company though!

[sbakoola]

I went with a brollie around 2006 for 1 year when I was on a really high rate and have ever since regretted it. Money down the drain at the higher rate of income tax, whether you like it or not.