True Dynamic provides professional, efficient and specialised services to fulfil your accountancy needs. When deciding on becoming a contractor it would be wise to understand what options are available to you when managing your income and salary. At True Dynamic we offer a number of solutions to our clients and we are more than willing to assist you in choosing the best possible option for you. There are many options that contractors can use however the most common is by trading through an Umbrella Company or Limited Company.
An umbrella company is usually a single company that deals with a large number of contractors. The main benefit of using an umbrella company as a contractor is that they often deal with the paperwork so you the contractor has a reduced amount of administration to deal with, it’s also the easiest option if one decides to enter contractual work for a short period of time. The disadvantages of using an umbrella company is mainly the reduced net income compared to using a Limited company.
Using a Limited company is the most beneficial way of working as a contractor as it is secure, tax efficient and flexible . The main benefits include ensuring you receive more of your hard earned money. You gain complete control of your financial affairs and you are also able to claim wider expenses. You are essentially running your own business therefore you are your own boss and you can choose where and when you wish to work. You also have access to the flat rate VAT scheme as a contractor under a Limited company which will increase your net income. The small disadvantage with choosing a limited company is that the administration work is far more in depth to that of choosing an Umbrella company. However this is a small task when one takes into account how much more net earning you will take home compared to choosing an umbrella company.