About Contractors Recruiters Guidance Referrals Blog Contact LOGIN JOIN NOW SWITCH NOW Making The Switch From Umbrella Employment To Limited Company Contracting 15 SEPTEMBER 2021 SHARE THIS POST If you are here reading this article, there is a good chance you already know about the benefits of umbrella employment. It is an excellent platform for contractors starting, providing employment security with lots of admin and insurance support to get you started. So why would you want to think about switching to limited company trading? If you have established yourself as a contractor, are happy with how the lifestyle treats you and have a steadily increasing hourly (or daily) rate, then you may benefit from operating through your own limited company. Why Switch? Let’s explore how you might benefit from switching over to a limited company trading: Full control over your finances will allow you to minimize tax and retain more of your earnings Flexible pension savings options Claiming expenses and VAT Enjoy full employment benefits as an employee of your company Increased employability and the possibility to take on more work/expand your business Build and develop your brand, with training paid by your company These are just some of the main benefits, depending on your particular circumstances. You may be able to find more after talking to an accountant. Ending your umbrella employment Once you’ve decided that incorporating a limited company is indeed the way you want to take your contracting business, here are some tips on how to end your employment with the umbrella company: We recommend switching just after your contract expires to avoid any complications in case you have a tie-in period Look up the notice period in your contract Make arrangements with your umbrella to settle all your hours and any outstanding payments Request a P45 leaver from your umbrella as you will need this for the payroll in your limited company If you are with SmartWork, make sure that you speak to your Business Manager to guide you through the process. Setting up your limited company The first step of switching over is finding an accountant that will help you run your limited company and submit accounts, remind you of deadlines, etc. If you are a SmartWork contractor, you are lucky because our sister company, MyAccountant, is a specialist in contractor accounting with FCSA accreditation and two decades of experience. That means your assigned Personal Accountant can help with everything, all in-house. Incorporating a limited company is relatively quick, can be done in 24 hours and is typically offered free by most accountants. The accountancy fee you will pay will depend on the services required, some of which are dictated by your contract. Make sure that you only pay for what you need, and look out for those hidden fees. Among other tips mentioned in this article, make sure that they take the weight of running a company off your shoulders. If you don’t want to worry about any of the above, contact your business manager or MyAccountant directly on 0800 917 9100 or at info@myaccountant.co.uk. Switch Complete Once you are all set up, you will find that operating via your limited company requires a little more work and attention, but there is nothing to worry about with the right accountant at your side. In time you will find that the benefits will far outweigh the little extra effort it requires compared to umbrella employment. We hope you’ll find this article helpful in answering some of your questions. If you’d like to get in touch with MyAccountant, please feel free to call them on 0800 917 9100 or send an e-mail to info@myaccountant.co.uk. For more news and blogs, remember to follow us on LinkedIn, Facebook and Twitter. SHARE THIS POST PREVIOUS UMBRELLA GUIDE: PENSION CONTRIBUTIONS EXPLAINED NEXT DO I NEED TO SUBMIT A SELF-ASSESSMENT TAX RETURN IF I USE AN UMBRELLA COMPANY? YOU MAY FIND THESE ARTICLES HELPFUL What is an Umbrella Company? 20 JANUARY 2021 What is it? The primary function of an umbrella company is to organise payments for fix-term work undertaken by independent... READ ARTICLE Umbrella Insurance Explained 09 JULY 2020 One of the benefits of contracting via an Umbrella company is freedom from admin. This is no different when it comes to insurance.... READ ARTICLE Disguised Remuneration – the April 2019 loan charge 22 FEBRUARY 2018 Following our previous look at loan schemes and how these impact your choice of umbrella provider, the latest in this series looks at... READ ARTICLE Whitefriars, Lewins Mead, Bristol, BS1 2NT Registered in England & Wales | Registration No. 4207299 About Contractors Recruiters Guidance Referrals Blog Contact Us HAVE QUESTIONS? Call SmartWork today on: 0800 434 6446 REQUEST A CALLBACK © 2021 smartwork.com Ltd | Designed by Lucid Design Terms & Conditions / Privacy Policy Gender Pay Statement Modern Slavery and Human Trafficking Statement