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Business start up

Are you ready to turn your idea into a business? Careful planning, research and preparation is required at this early stage, so here’s a few steps on starting and setting up.

What is an agency (PAYE)?

Agency (PAYE) is similar to the Umbrella solution but not as tax efficient. The Agency, normally a recruitment agency, will calculate your tax and national insurance liability for you and collect the total due under the contract from the customer. The agency will then pay you the balance of your salary.

Unlike the Umbrella arrangements you are not employed by the agency, and as such you cannot claim for your business expenses for items such as travelling and subsistence. They do take away the hassle of the paperwork, but you do not gain employment rights or the ability to claim for your expenses.

If you’re on the look-out for an Umbrella company that pays you directly via PAYE and takes care of all the necessary tax and NI calculations and payments on your behalf, then get in touch with Brookson Umbrella solution. Their hassle-free solution means they get on with keeping the taxman happy, leaving you free to do what you do best.

Is a Limited Company right for me?

If you want to run your own business that has its own legal identity and can earn profits and pay taxes in its own right, then having your own Limited Company could be right for you. For contractors with an annual income of more than £30,000 this trading model is often the most tax efficient.

Wondering what your take home pay could be as a Limited Company contractor? Use our free calculator now to get an idea of how much you could take home.

How does a Limited Company work?

A Limited Company is a separate legal entity in its own right; meaning it enters into contracts, owns property, will generate income and incur expenses. It’s also independent from its owners and directors.

It will have its own bank account that is kept entirely separate to the directors private bank accounts.

A Limited Company is owned by shareholders and run by directors, who are often one and the same in smaller companies. By choice a company can also have a company secretary, although this is not a legal requirement. Shareholders can be paid dividends, and the amount paid must usually be paid in proportion to the shares held. A more complicated share structure can be discussed on request. You are an employee of your Limited Company, not self employed, and will usually take a wage to reflect that. As company director you are legally responsible to act in the best interests of the company and for the submissions the company is required to make.

Our resources section of the website has lots of information about Limited Companies, from the pros and cons, what to expect, and how they could benefit you. Take a look today for a more comprehensive glimpse into the world of Limited Companies.

What do Umbrella companies do?

Umbrella workers are employed by the Umbrella company which deals with the ultimate customer. The Umbrella entity performs all of the necessary administration that would otherwise fall to the contractor in return for a fixed fee. As a contractor employed under an Umbrella arrangement for tax purposes you are treated very similar to a “Permie”.

If you’re on the look-out for an Umbrella company that pays you directly via PAYE and takes care of all the necessary tax and NI calculations and payments on your behalf, then get in touch with Brookson Umbrella solution. Their hassle-free solution means they get on with keeping the taxman happy, leaving you free to do what you do best.

Which company trading structure should I choose?

The structure you choose to trade under as a contractor has commercial, financial and tax consequences, but the best choice for you will be determined by your individual circumstances, your desire to maximize your take home wages and views on risk and any administrative burden.

Increasingly the most popular and generally the most tax efficient contractor trading model is contracting through a Limited Company. However, it does require a commitment to the lifestyle of being a contractor and offers the rewards of freedom, flexibility and control over your career path.

Whichever route you choose it is important that you have discipline and comply with the legislation relevant to running a business.

Contact us today to discuss your current circumstances, and to see if going Limited is the right option for you.