We understand that the new ‘Off-payroll’ worker rules are changing the potential net income that has been available when operating via an LSC (Ltd. company).
Become a PAYE worker for the Public sector client. It is our belief that by doing so you may be construed as a ‘temp/inside IR35 contractor’ for future projects should you accept that this is the easiest option.
(Public Sector Pay)
A compliant umbrella for Contractors, Freelancers, Locums, Temps and Interims
Simple payroll with no strings attached
Join other public sector workers today
Read on to find out more
(Accountants 4 Contractors)
Only for those trading outside of the public sector, a limited company offers improved payment options, less taxation and a longer term company structure.
An umbrella company is essentially an intermediary between you and the public sector body you contract for. You are employed by the umbrella company, which means IR35 is never an issue, because you pay PAYE/NIC on your earnings and the umbrella company handles all your specialist contractor accounting administration, including invoicing, tax, VAT and NIC, for a fixed fee.
Your pay is still based on your contract agreement; the umbrella will take care of invoicing and chasing your money for you.
Using an umbrella company is a practical way to deal with the new rules and also when starting with freelancing or contract work, especially if you are not sure if this kind of venture is right for you.
Working for an umbrella company allows you to remain with the public sector client and, if new to contracting, it allows you to test the waters without making the serious commitment of setting up as a limited company.
You can always consider a more permanent option, such as forming a limited company, further down the line if things work out for you and our sister company, Accountants4Contractors, can assist in that area.
Can I use my current Ltd company under an umbrella?
For many existing contractors that are being forced down this route, this is the solution that may suit best.
Use the umbrella company to receive the ongoing fees from 07/04/2017 to comply with all the new off-payroll public sector. Retain the existing Ltd. company and utilise retained profits within the business to cover ongoing expenses. This Ltd. company can be set to ‘dormant status’ and fees controlled down at a low level to ensure that this makes financial sense.
How this works:
The Umbrella paying existing income
The Ltd. company to cover some expenses and be available to receive other revenue
You have the flexibility to operate under the new rules, but leaving the door open to move between Public and Private sector.
You will still be able to claim some costs and expenses through your existing limited company while also operating through an Umbrella, for example:-
Committed expenses, such as contractual costs (if your mobile is on a contract). However, HMRC will expect that you do not renew such contracts when they end.
Expenses searching for the next role – such as travel
HMRC will not allow you to claim the expenses you incur directly in order to fulfil your Umbrella role, e.g. subsistence.
How does our Public Sector Pay work?
Public Sector Pay is an employment management company set up for the sole purpose of employing public sector temporary workers; Contractors, Freelancers, Locums, Temps and Interims for example and making their contracting life more rewarding, hassle-free and, most important of all, legally compliant.
Our service exists to help those contractors engaging the public sector ensure that they have an economical solution.
How can we assist you and make my life easier?
We can remove the hassle of operating your payroll – it’s pretty simple. There really isn’t an upsell here as an Umbrella Company is simply an external payroll business. It isn’t sexy, but it will tick all the boxes for you to overcome the new rules.
Why choose us?
We value our relationships, so we have the best customer support
Contractual compliance & administration
Tax advice, planning and returns which will be increasingly more complex with mixed roles
Financial protection and investment advice
We are owned by a reputable accountancy practice, which will give you access to qualified accountants when the time is right. While operating via your Umbrella, we will get the job done and ensure that your invoicing/pay is all spot on.
If you choose to become an umbrella contractor then, legally speaking, you will become an employee of the Umbrella. Umbrella employees take a more ‘hands-off’ approach to administration and financial management than those who choose to run their own limited company.
Advantages of Umbrella Contracting:
‘Hands-off’ approach to administration and management
Easier access to mortgages and other types of credit
Less responsibility and no special legal duties
Easy and fast registration
Good for short term contracts
Good for lower-paying contracts
Employee insurance cover included
Generally preferred by employment agencies and, with the new off-payroll rules, it is an essential option for public sector workers.
This is something to consider ONLY if you will be trading outside of the public sector. If that is the case please do contact us through email or 0207 6143100.
There are a number of things to consider when making this choice. Every contractor in every industry has different needs and circumstances. One size doesn’t fit all and so we can help you consider a few key questions including:
Are you happy to spend about half an hour a month on my financial admin?
Will you be contracting for more than 6 months?
Will your contract fall under the IR35 ‘hidden employment’ tax regulation?
Are you able to be a Director?
Do you earn more than £15 per hour?
Contact us to discuss this option if trading outside of the public sector.
What can a Limited Company do for me?
When you set up a limited company you will become a company director. This gives you a number of options for how you receive payment. You can either take a director’s wage or you can get paid through more tax-efficient dividend payments (or a combination of the two).
You will also have the opportunity to claim back business expenses that you can use to offset your tax bill, which you are not able to do when working under an Umbrella company.
Setting up a limited company is more tax efficient than working as an umbrella employee. However, it does mean you will have a little more paperwork and administration. As a Director, you will have some responsibilities that must be taken seriously – particularly those that relate to Companies House and HMRC, but they can be dealt with efficiently by our accounting team.
Advantages of Limited Companies:
Less taxation so you take home more
Longer term company structure
Limited financial liability if your company is unsuccessful
We operate PAYE only and are not associated with any other form of payment processing solution. You can therefore rest assured that we are secure, risk-free and dedicated to providing you with the best service available.
We offer a dedicated single point of contact for all contractors.
We pay you as soon as the Agency / Public Sector client pays us.
We make joining us as easy as possible by providing a secure portal for documents.
We are partnered with a team of independent financial advisors that offer tailored advice on all things financial, protection and investments.
Most important of all, we are part of an established and specialist Contractor Accountancy Practice. So when considering making changes or moving between Private and Public Sector contracts, we are fully equipped with Qualified Accountants to help guide you to the best and most appropriate solution for you.
Our aim is to ensure that you have the least hassle in any contract and where possible you gain the most favourable tax treatment on your income.
Our service guarantee
An accurate pay illustration is supplied to you in writing prior to joining. We base this on your individual circumstances and never use assumptive web calculators or guesswork.
Simple and quick form free registration ensures that opening a new PSU account couldn’t be easier. Whether you choose to do it over the phone or online, the whole process shouldn’t take more than five minutes.
We will process all agency/client contract within 24 hours of receipt, then we send them onto you within your portal, where necessary, for authorisation and approval.
All received cleared funds are processed on the day of receipt and paid to you (so we don’t sit on your money).
We process all timesheets and issue invoices within 24 hours of receipt.
Our team will assess every one of your agency contracts, supplying you with a schedule for each.
We are here to help, to talk to you in plain English and when advice is needed we do so proactively to ensure you have the right solution for each and every contract.
If you have any problems, we will acknowledge your complaint quickly and efficiently and get started on putting things right. The majority of our queries are resolved within 24 hours.