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.


  • Having recently closed my limited company, Umbrella helped throughout the process and provided clear advice. Special mention to Nicola Worthington for answering my questions and sorting out my final returns in a professional and friendly manner.RB 7 October 2020

  • I had great service from Umbrella - particularly Nicola Worthington who calculated and submitted my self-assessment. She was easy to work with, kept me informed and submitted my assessment way before it was due.Dale N 22 Sep 2020

  • Having started my own journey into the interim market, I chose umbrella accountants to take care of the financial matters, not only are they excellent, swift, professional and precise. Nicola goes above and beyond to assist help advise resolve and guide, she has been outstanding! excellent business and team...! Highly rated.Jason 17 Sep 2020

  • I have been with Umbrella for the last 3 years. I had a great experience working with Nicola​ Worthington. She is knowledgeable, professional and very helpful with all round personal and company tax queries, I would highly recommend Umbrella.Simon 15 Sep 2020

  • Over the past 4 years. Umbrella, have acted on my behalf. During these years. I am pleased to report that I never had any issues with the service provided. The staff members are knowledgeable, helpful and polite. If, in the future I required an accountancy service. I would re-engage with Umbrella.D Timperley June 2020

  • recommended. I have been with Umbrella for three years using both their umbrella payroll and their Ltd company accountancy services. I can recommend them to anyone. Excellent, helpful and always friendly.Sean R March 2020

  • Overall experience of dealing with was absolutely fantastic. This was my first time going into contracting and they were there every step of the way. When I had question or queries - they were answered without any delays and someone was always there to assist. The whole online portal they use is very good too. Overall experience was excellent - highly recommended.JS February 2020

  • Efficient, professional and reliable. I have used Umbrella accounting services for over five years both as a PAYE contractor and as a contractor through my limited company. In both instances, I have found Umbrella employees to be helpful, knowledgeable, and professional. They are very reliable especially with payments and paperwork. I totally recommend their services.FC December 2019

  • Very Good level of Service. Always paid on time and any issues/questions were dealt with swiftly.Would recommend Ison September 2019

  • Great efficiency and great turnaround speed of service in doing my accountancy self assessment tax returns that made it quite stress free. Very happy with Micaela's work I would highly recommend Thanks.Teresa January 2019