So while searching for jobs I noticed this. I get the general difference but what does it mean in practice. Two salaries quoted on last one I noticed. £13 + holiday pay (Paye) per hour of £16 (Ltd/Umbrella). This particular position is a 3 months contract so my question would be which one is better and why?
ok, one would be through an agency, one through a Ltd company. The difference would be that some new EU regulation states that temporary workers must have holiday pay, so an amount is taken off.
Having been a contract worker all my working life, I've learned the hard way...for some the Ltd company thing works but for the vast majority of us, go paye. The money will be slightly less paye, but yes you do get the new holiday perks (the EU have reversed the working time directive for me now, so I'm about to lose mine), but it's better than a big fat TAX bill cause you never paid enough or you claimed something you were not entitled to as a limited company. If you do go Ltd company get a good accountant, it's worth the outlay in the end.
So if it is a short term contract then better option is umbrella option as you can always have holiday after it. On my part do I need to do anything extra if it is the Ltd/Umbrella option? You know open my own limited company or something?
I have heard of people uing Isle of Man trusts....................... very tax efficient.........................
Dont forget your NI contributions When self employed I missed some which i hadnt realised and just had a bill from 2006/7
