Which Umbrella Company | Onshore Umbrella Companies
Which Umbrella Company should you choose?
See an evaluation of top UK Umbrella Companies further down the page and pick the best umbrella company for you.
What is an IT Contractor Umbrella Company?
IT Umbrella Companies started up circa 1999 in response to the new IR35 tax which the Government brought out because it perceived some contractors as ‘disguised employees’.
It basically employs the contractor. This allows the contractor to claim certain expenses against tax which he or she couldn’t do as an IR35 caught contractor. The Umbrella Company deals with all the contractor’s paperwork and admin.
Normally the contractor will fill out a timesheet and claim expenses and the Umbrella Company will invoice the agency or company, deduct the expenses, deduct and pay the taxes and NICs and pay the contractor. The best UK Umbrella Companies will do all this. Some are mainly IT Umbrella Companies and some cater for all contractors.
Read the advice below and see which umbrella company is best for you.
Onshore or Offshore Umbrella Company
The onshore umbrella company is the safest route especially for those contractors caught by IR35. However, more and more contractors are now using the offshore umbrella company route.
Most offshore Umbrella Companies are completely legal and are used by the top dogs such as Chancellor Osborne whose family have an offshore trust worth £4.5m.
Others to use offshore umbrella companies are David Cameron’s dad Ian and his father-in-law Lord Astor.
Another to use offshore umbrella companies is Lord Ashcroft, the chief donor to the Conservative party.
Offshore Umbrella companies are typically located in the Isle of Man. They typically return contractors 85% of the money they earn.
Onshore Tax Solutions
Albany run a very clever plan. It is completely onshore but you retain as much money as you would with an offshore umbrella company as you retain 85% or more of your money. THey do it via Limited Partnerships. Accountants and Lawyers have long had the tax benefits fo partnerships and now it is open to IT Contractors and other contractors too.
To find out more about this clever plan click on Albany Limited Partnership.
Offshore Top Umbrella Company Options
With the Offshore option you pay all of your money into a Trust and are typically loaned money back again, although there are variations. This is why they are much more lucrative for contractors. Here is an evaluation of some of the leading ones and what a contractor who earned £100,000 a year would retain from the various options.
Ltd Co £75,000
Offshore Solution £87,000
1. Smarter Paye
Smarter Paye understands when it comes to your contract and salary it’s important to build a relationship built around trust. We have helped 1000’s of contractors and freelancers increase their take home pay with a simple and robust system, which allows retention rates of 85%-91% .
We provide a simple process to change payment providers and in most cases it can be done within 24 hours. So you could be getting a pay rise sooner that you think.
To find out how to make your contract smarter, by filling out the form here Contact Us
BestPay know how important your pay is and want to build up a long-term relationship with you and see their main benefits as:
Easy to Use. You submit a weekly or monthly timesheet online and BestPay take care of the rest. They invoice your client, collect monies due and pay you after calculating your tax; Fast & Efficient Service. Daily payments direct to your account.
If you are new to Contracting and have heard about IR35 or Umbrella Companies but are unsure what they are then BestPay are happy to give you Free Advice.
If you are a contractor but are spending your free time worrying about invoicing, accounts or tax then speak to BestPay today.
BestPay can remove the stress of tax and allow you to spend your free time doing the things you want to do – and you can keep up to 87% of your hard-earned pay.
Contact them: BestPay
3. Tower Umbrella Company
Tower Umbrella Company keep margins low so are able to allow contractors to retain up to 90% of their money, depending on income. They do all the paperwork and take all the hassle away from contractors and allow them to keep as much of their hard-earned money as possible.
Find out more by clicking – Tower Umbrella Company
Did you find out which umbrella company is for you?