NET 85% OF YOUR INCOME: http://www.tarpon-uk.com/contractor-salary-calculator/
0845 643 1580
info@tarpon-uk.com
We're here today to tell you about the benefits to contractors of using an Umbrella company as a payroll solution?
As a contractor looking for a payroll solution, there are primarily three choices:
form your own limited company,
go PAYE with the agency, or
use the services of an umbrella company.
Choosing a compliant umbrella company is by far the most legitimate, hassle free and tax efficient option.
So, why should contractors use a compliant Umbrella Company?
You'll be complying with MSC legislation and wont have to worry about IR35, as you will have permanent employment status.
The hassle of setting up your own limited company is removed -- joining an umbrella company is quick and easy to do. And you won't need to hire an accountant.
Your umbrella company is responsible for invoicing your client and chasing payments -- not you.
You'll then be paid through PAYE, taking care of tax and NI. Your umbrella will also process expense claims for you, reducing your tax and NI liabilities.
You won't have to worry about the hassle of time-consuming self-assessments, or saving for your tax bill.
You should also be entitled a full range of employee benefits including holiday pay, pension, childcare vouchers and much more.
SO .....at the end of the day just make sure that you choose a compliant payroll solution
Tarpon is an Employment Benefits Company which offers contractors an employment contract and a fully compliant HMRC approved tax-efficient payroll service. Tarpon are the first Umbrella Company / LTD Company to introduce a full range of employee benefits for contractors.
Umbrella companies - select the best umbrella company for youThe objective of an umbrella company is for contractors to benefit from being legally tax-efficient, without having to worry about the IR35 "contractors′ tax".The tax-efficiencies come from having genuine business expenses allowances that can be offset against tax. But this can only work and be legal if the allowances are negotiated with and agreed by HM Revenue and Customs. Without an HM Revenue and Customs approved Dispensation, an umbrella company would find it difficult to reimburse business expenses efficiently to its employees. The company employs you directly and calculates and deducts tax and National Insurance Contributions at source. That makes your work completely consistent with the objectives of HM Revenue and Customs and IR35. So, you have the peace of mind of knowing you are legal. The umbrella company will also bill clients and provide administration support and payroll. Some companies, like Tarpon, have matured into full-service employment benefits companies, offering employees an amazing range of benefits and services. In the case of Tarpon, these all come as standard. A word of warning...Composite companies and umbrella companies are often confused, and some composite companies deliberately give the impression that they are umbrella companies. The two types of company are very different.
In a composite company you are almost certainly part of a tax avoidance scheme and will come under the spotlight of HM Revenue and Customs. For more information on composites, click here.
In an umbrella company you are completely legal and IR35 compliant. You have employee status and pay tax and National Insurance Contributions at source through PAYE.
Questions you should ask
When looking for an employment benefits company, you should ask, "Dear employment benefits company..."
"...have you negotiated tangible, IR35-compliant terms directly with HM Revenue & Customs?"
"...could I be investigated by HMRC?" (Not a reassuring prospect.)
"...if "yes", can you prove you have insurance protection to cover legal fees, backdated tax and interest on unpaid tax and fines?"
"...will I be given a personal business manager to handle admin and invoice-chasing?"
"...do you offer ongoing tax-planning advice?"
"...do you offer a UK-compliant holiday and sick pay facility?"
"...do you offer professional insurance of at least £20m?"
"...will you give me access to a solicitor to check the employment terms and restrictions of my contract?"
"...will I be able to submit expense claims online?"
"...do you offer a personal pension, and allow me to save tax and NI by contributing part of my gross income towards it?"
"...can I see a credit report for you and your insurers?"
"...how will you support me if my agency or client pay late?"
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makes total sense. Glad Im contracting.
mramo 3 years ago