Umbrella Alternatives

Agency Payroll

Some Agencies are big enough to offer their own payroll function and can be useful if you are only working there for a day or so.

You in effect become an employee of the agency but this will stop you being able to reclaim business expenses and all your earnings are subject to tax and National Insurance.

It also doesn’t help if you planning to do work outside the agency as well.

Often Agencies will recommend that you find an Umbrella Company.

Own Limited Company

Benefits

• Enables you to build your own brand and possibly a saleable asset.
• If you are outside the scope of IR35 then there can be tax benefits.

Disadvantages

• The administration, cost and compliance to regulations of running (and being a Director) of your own Limited Company.
• Setting up your own back office functions for invoicing, cash collection, payroll etc.
• Initial cost of creating a Limited Company.
• Accountancy fees.
• If you expect to turn over more than £64,000 per annum you will need to be VAT registered and perform quarterly VAT returns and payments.