The Umbrella model is under attack from HMRC as the Government tightens its grip on expenses and National Insurance payment. In 12 months’ time, under the current Umbrella model, tax relief for expenses will only be given via a personal tax return claim. It’s also the case that Employer’s National Insurance will then be payable on reimbursement expenses putting margin pressure on Umbrellas, unless they pass it on. A wider debate about the complete removal of relief for T&S still goes on and Umbrella workers could see it removed in whole or part during 2016. Umbrella workers will have to do a personal tax return to claim tax relief on expenses: Ouch!
Use our free Take Home Pay comparison calculator to see how much better off you could be in 2015 by forming your own Limited Company…and then imagine 2016 being even better!
Simply input an estimate for your salary and the fees billed to your client and find out how much better switching to Limited Company contracting is for you.
Check out our guide for freelancers and contractors: Limited Company, Umbrella or Sole Trader – which is right for you? Or call us on 01202 912464 to chat through your options and work out what is best for your circumstances.
If your day rate is £200 you could take home an extra c£6,000 per year
If your day rate is £400 you could take home an extra c£12,000 per year