Newbie question Umbrella versus Ltd

[LisaContractorUmbrella]

Your earnings will only be significantly different through a Ltd Co if you are outside IR35 and therefore entitled to draw dividends from the company. If you are inside your earnings will be subject to PAYE as they are through an umbrella company. Therefore, you will need to get your contract reviewed to determine your IR35 status and also make sure that it is a genuine reflection of your working practices.

As TF and Mal have said, running a company is a big responsibility and you need to make sure that you understand your legal obligations from the start - a good accountant will certainly help but, at the end of the day, the buck stops with you

[TheFaQQer]

Company invoices, company gets paid.

Salary is paid to the employee, any tax and/or NI due is paid to HMRC. Salary is declared to HMRC via RTI.

From profits, you can pay dividends in proportion to the number of shares that you (and anyone else) owns. You can do this whenever you want, as long as you have the profit to pay from. If you haven't got the profit and make the payment, then it's an illegal dividend which means that it gets classed as salary, attracting tax and NI.

[malvolio]

Hi All

Ive been contracting for approx 4 months now using an umbrella company but am thinking of using a LTD company to maximise my earnings and Nixon Williams seems like a good deal for £95 per month.

One thing concerns me though, I dont want any delays in payment into my personal bank account, if i submit invoices to the agency as the umbrella company do how will me take home work, does it go into my business bank account, then i decide how much salary of that i want to extract weekly or monthly.

Any help would be appreciated.

I think a bit more reading is necessary, but the key thing to remember (or learn) is that you and Your Co are two completely separate things and they each have their own money; do not ever mix them up.

Your invoice goes into YourCo, you as director decide how (and when) to pay it to you as guitarxx. There are complications, such as RTI making you pay things on a set date, but talk to the accountants about that.

[guitarxx]

Hi All

Ive been contracting for approx 4 months now using an umbrella company but am thinking of using a LTD company to maximise my earnings and Nixon Williams seems like a good deal for £95 per month.

One thing concerns me though, I dont want any delays in payment into my personal bank account, if i submit invoices to the agency as the umbrella company do how will me take home work, does it go into my business bank account, then i decide how much salary of that i want to extract weekly or monthly.

Any help would be appreciated.