At ClearSky, we believe that going limited is the best solution, but we also understand that this can be a big step for many.
Did you know that as part of our aim to make the lives of contractors as easy as possible, we offer a limited company formation only service, even if you're not a ClearSky client? If you're undecided, we want to shed some light on some of the benefits of forming your own limited company.
You’re in control
Being a limited company director means you’ll effectively become your own boss. This gives you greater control when it comes to your business and finances, meaning you can deal directly with your clients and negotiate your own rate of pay.
Greater tax efficiencies
Contractors are able to claim tax relief on a number of business expenses as long as they are incurred solely and exclusively for the purpose of your company. You can find a full list of expenses here.
You can also benefit from tax reductions by paying yourself a combination of salary and dividends. The rate of tax relief will vary depending on your earnings, but you can enjoy a lower rate of tax than your salary. You can find more information about dividends here.
Higher take-home pay
Compared to working as an umbrella employee, you can expect to take home around 75-80% of your earnings. Working under a PAYE umbrella also means that your salary would be subject to National Insurance and tax deductions on your behalf. You can consult our take-home pay calculator for a more accurate estimation of how much you could take home.
One of the best reasons for forming a company is the control it gives you. Because your company is established as a separate entity, your personal finances will be protected. As a shareholder, you cannot be held personally responsible for any debts which your limited company may incur.
How can ClearSky help?
Setting up a limited company can be a daunting prospect and for many new contractors, knowing which steps to take is a challenge. That’s why the team at ClearSky are offering a limited company formation service.
Entrusting the formation of your company to our team means you can rest assured knowing that we will handle incorporation with Companies House, registering for VAT and we will throw in free business banking.
For more information, visit our company formation page.