If you’ve been contracting under an umbrella company and you’ve decided to start your own limited company, this is a big step and can bring changes to your lifestyle. And though this can feel like an uncertain time, it doesn’t need to be the case.
To help you transition to contracting under your own limited company and to help you determine whether you’re ready, we’re sharing some insight into what you can expect.
Greater take-home pay
Limited company contractors generally take home more than their PAYE counterparts, so more money will land in your account. However, this does come with the additional responsibility of paying your own tax, National Insurance and paying yourself via salary and dividends. Luckily with specialist contractor accountants like ClearSky, we’ll take on much of the paperwork for you on your behalf and guide you at every step of the way.
Working under an umbrella means you’ll have the support of a recruiter to find you suitable roles and pay your salary. But when you go limited, this is largely down to you. You're in control regarding the roles you undertake, the salary you charge and sometimes, your contract length.
This process can initially be difficult, but as you build your skills and your industry connections grow, you’ll naturally fall into the rhythm of things.
Opportunity to plan for the future
As the director of your own company, you may also find yourself with the opportunity to plan for the future. As you’re no longer an employee, you will no longer be entitled to the same benefits like holiday entitlement and pensions.
On the other hand, you will have the opportunity to plan and disburse your company’s income more efficiently.
When you first decide to go limited, you will need to register your company. From here, you will be responsible for statements, expenses and annual returns. Although this can seem daunting, many new company directors find that enlisting the help of a contractor accountant is beneficial. At ClearSky, we can incorporate your company and support you with your monthly administration.
Help from a contractor accountant
The thought of being faced with a new set of responsibilities can be daunting. But the right help will make your transition seamless and stress-free.
At ClearSky, we’re specialists for contractors and we’re well-equipped to provide all of the help you need to make your new contracting endeavour as easy as possible. To see how we can help you, get in touch via our contact page.