I have a Tier-1 general visa and do not have any previous experience of contracting. I am still in my home country. I am hoping a UK contracting offer soon. The contract would be just 6 months. I am in a dilemma whether to go under an umbrella company or to form a limited one?
I have recently been contacted by an umbrella company to tell me the benefits of going under umbrella, one of which I understand is the ease and convenience compared to setting up and maintaining limited company. Plus, it seems that using expenses (accommodation, commutation, lunch, etc.) to reduce taxable income is possible with the umbrella option as well. Plus, the umbrella company claims they will charge just 60 pds/month, and no set-up/registration fee.
Can anyone comment on above? And can anyone tell me the benefits (monetory and otherwise) of limited company over umbrella?
I still have 3 weeks time to start the contract and since I am unwell at present, I would prefer to take few days rest and later move to UK. This also means that if I were to go for limited company option, then my limited company formation will be delayed (because as I understand it is not possible remotely, because I do not yet have UK address etc.). And this would also mean that the contract preparation and signing will be delayed.
On the other hand, the umbrella company is promising to get me registered with them even before I travel to UK, which would also mean that I would be able to finish the contract signing formality sooner and will thus have the peace of mind of having officially secured the contract job.
One more thing, in case you experts believe that limited company is much better option than umbrella route, then how does this sound: I start with the umbrella route and go with it for a month, and later form a limited company and switch to it and leave the umbrella? Any cons of doing so?
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