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Switching from an Umbrella Company to setting up a Limited Company

Posted by Genie Accountancy on 06-Aug-2015 11:00:00

Here at Genie Accountancy, we love hearing from happy clients. Have a read of the below & find out why making the decision to move from umbrella to setting up their own limited company was the best route for one of our clients....
"Like most contractors I started out following the “best” advice, ‘cut your teeth in contracting by using anTICK Umbrella company’. What a myth!

Running a Limited company is easy and something I should have done from the off.

Yes, the responsibility lies with me but that’s the way it should be why wouldn’t I want to be in charge of my money and when I pay tax on it? I accumulate personal tax at the point I draw funds from the company. None of this losing half a pay cheque at source. A proportion of my dividends attract nil tax, which allows me to budget my lifestyle in a way I never knew possible.

My take home pay has increased by about 20% due to dividend tax saving. It’s like I am operating at a completely new day rate and with added freedom too! As an Umbrella employee I was tied to my desk, ensuring I was always compliant with employee rules. Being an independent contractor takes all that away, I come and go as I please even working from home a few days too. It really is a lifestyle change and I love it!

I have lunch with colleagues still operating under Umbrella companies. They still fear legislation and the unknown, thank goodness those days have ended!

Now I’m the boss, in control of my money, and the way I work!

Working through an Umbrella I dreaded the looming finish date. That mad rush to find a new role or hope I get an extension, whilst rushing to finish the contract I was on! With a Limited that stress is gone. I draw funds from the company, provided the money is there of course, as and when I need it. My accountant helps me to budget this. Now I take three months off between contracts, giving me a better opportunity to secure higher day rates.

Registering for the VAT flat rate scheme increases my day rate too. The company turnover increases and in turn I receive a better take home.

Choosing the right accountant is imperative. Find a specialist who can meet you and explain all the ins and outs. My accountant, Genie Accountancy, in my eyes, are a business partner I would never be without. Gavin is there when I need him, phone, email or even a quick coffee, it means so much. He even humours my crazy ideas and I have a few!

Jumping from Umbrella is so straightforward I did it mid-contract! I notified my Agency and they drew up the contract. Genie Accountancy set my company up in a few hours, I did the bank account and insurance. The next week I was invoicing as a Limited company, simple!

Being an expert, Gavin assured me of my IR35 status giving me the peace of mind that I am compliant.

What are you waiting for, join me today"! 

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