Benefits of a Limited Company

With a little extra paperwork and forward planning, the limited company option could significantly boost your take home pay

Working through a limited company has some significant benefits over umbrella contracting and other types of self-employment. 

  • Limited company contracting can be more tax efficient than working through an umbrella company. Limited company contractors can take a proportion of their take home pay through dividends, which are subject to lower levels of taxation than income.
  • The VAT Flat Rate scheme makes life simpler and more tax efficient for some limited company contractors. Get in touch to find out if you can benefit from this scheme.
  • Setting up a limited company and finishing your company name with the letters ltd can help project a more professional image of your services. As well as reinforcing your brand, it can also benefit you if you have other business interests or need to employ staff.
  • Limited liability means that you cannot be held personally responsible for any company debts if your business fails. One important exception is if you personally guarantee finance for the company.
  • You can keep complete control of your financial affairs
  • You can grow your business, attract investors and plan your taxes more efficiently by creating different share classes in your limited company.
  • Limited companies are legal entities that can be sold or passed on when the time is right.
  • When you have finished contracting, then you may be able to benefit from Entrepreneurs’ Relief - a low rate of capital gains tax which is applied to business assets in some circumstances.

Clearly there many advantages to limited company contracting, but this model of working isn’t the best solution in all circumstances. There are some important things that you need to think about before you go down the limited company route.

Important things to consider

  • Setting-up and running a limited company comes with new responsibilities and it may not be suitable if you only expect to be contracting for a short time.
  • As the business owner and director, you will have overall responsibility for things like your accounts, insurance policies, making payments and chasing unpaid invoices. Although we strive to assist as much as we can, you will bear the ultimate responsibility for ensuring that the business is compliant with expenses rules, IR35 legislation and other relevant company legislation.
  • As a limited company contractor, it is likely that you will fall outside the Agency Worker Regulations, meaning that you won’t be guaranteed the same legal protections as other workers in a particular workplace.
  • Limited company contractors have to do some extra paperwork. We estimate that a typical contractor will have to put 15-20 minutes aside each week for this kind of administration.
  • Limited company contracting may not be suitable for contractors earning less than £35,000 per year.


  • Nicola has been fantastic - kept me informed and very professional.Dale Norman October 2021

  • Very helpfull and prompt. Always came back as promised and provided the necessay information and guidanceM manir October 2021

  • Nicola Worthington has been a credit to Umbrella Accountants. She has always offered considerable professional advise to myself on my accounting and my tax affairs as and when required over the past few years. I would recommend both Nicola and Umbrella Accountancy Services.AC September 2021

  • I started my company in 2016 when I was offerred 6 months contract work. Now sadly I'm closing my company as I've moved back to PAYE work. Nicola Worthington and team have been very helpful with my accounting and tax affairs and has made it as easy as possible for me to understand what I needed to do. All the best AndyAndy September 2021

  • I have been with Umbrella for around 2 years now since they set up my limited company for contracting purposes. I have found their service to be very reliable and really enjoy the ease of using the freeagent service. A special mention also to my accountant Nicola Worthington, whose knowledge and expertise have been so valuable. Along with that, her availability to answer questions at critical times have been really vital for me and my business - thank you.Stephen Roberts September 2021

  • Nicodemus Ginindza has been my liaison since working with Umbrella - his support and assistance has been excellent, always on call to attend to queries. Fantastic service ! Would highly recommend !Hemel August 2021

  • Excellent service as usual.Luis Ferrinho August 2021

  • I am extremely happy with the service I have received and the clear explanation of said service from Nicodemus Ginindza. I am looking forward to our continued relationship. I have no hesitation whatsoever in recommending this company.Roy Ginn July 2021

  • Very helpful for a beginner with self employment, Nicodemus was welcoming and helpful.Jeanebe July 2021

  • Efficient, responsive and quick in resolving issues.Shantanu July 2021