Umbrella V Limited Company

If you’re new to contracting then you have to choose a contractor option that's best for you

There are a number of things to consider when making this choice. Every contractor in every industry has different needs and circumstances. One size doesn't fit all and so we can help you consider a few key questions including:

  • Are you happy to spend about half an hour a month on my financial admin?
  • Will you be contracting for more than 12 months?
  • Will your contract fall under the IR35 ‘hidden employment’ tax regulation?
  • Are you able to be a Director?
  • Do you earn more than £15 per hour?

If you would like advice tailored to your particular situation then contact our experienced team now. They will be able to answer any questions, help you choose the right service and provide a personal illustration. Call: 0800 121 6513. 

Download the Umbrella Guide to Contracting

Download our NEW IR35 Guide for contractors

Limited Company Option

When you set up a limited company you will become a company director. This gives you a number of options for how you receive payment. You can either take a director's wage or you can get paid through more tax-efficient dividend payments (or a combination of the two).

You will also have the opportunity to claim back business expenses that you can use to offset your tax bill.

Setting up a limited company tends to be more tax efficient than working as an umbrella employee. However it does mean you will have more paperwork and administration. As a director you will some responsibilities that must be taken seriously – particularly those that relate to Companies House and HMRC.

Umbrella Accountants specialise in helping contractors set up and efficiently run a limited company pain free. We have a team of fully-qualified friendly accountants on hand to help you and answer any questions.

One of our most popular small business accountancy services is the provision of the software packages FreeAgent and Xero. These portals make accounting tasks easy such as issuing invoices, filing expenses and paying taxes.

Advantages of Limited Companies:

  • Less taxation so you take home more
  • Longer term company structure
  • Limited financial liability if your company is unsuccessful
  • Greater legitimacy with clients and suppliers
  • Essential if you wish to grow your business

Umbrella Contracting Option

If you choose to become an umbrella contractor then legally speaking you will become an employee of Umbrella.co.uk. Umbrella employees take a more ‘hands-off’ approach to administration and financial management than those who choose to run their own limited company.

Umbrella.co.uk takes control of invoicing, paying taxes and keeping you compliant.  We will also be able to process allowable expenses on your behalf.

Advantages of Umbrella Contracting

  • Full employment rights such as statutory sick pay and statutory maternity pay
  • ‘Hands-off’ approach to administration and management
  • Better access to mortgages and other types of credit
  • Less responsibility and no special legal duties
  • Easy and fast registration
  • Good for short term contracts
  • Good for lower-paying contracts
  • Employee Insurance cover included
  • Generally preferred by employment agencies
  • Get exclusive shopping rewards and discounts from leading UK retailers with Umbrella Rewards

If you want any advice to help inform your decision, please contact a member of our experienced team. Call: 0800 121 651


  • Excellent service provided by Umbrella.co.uk. Easy to set up, quick weekly payment, no issues at all. Very pleased and will use again. Samir H August 2020

  • Excellent service, best umbrella company I've ever used. Reliable, prompt replies and a whole host of benefits offered, including GP appointments. Highly recommended. Sonam August 2020

  • Very happy with umbrella. In my two year plus with them I got paid on time always, with advance notification and payslip every time. Very efficient and prompt in getting back with enquiries. Ade F August 2020

  • Professional efficient company any query I raised was always attended to promptly would recommend. 5 stars J B August 2020

  • Excellent. My experience with Umbrella was excellent, if I had an issue or query they were very quick to respond and assist. They make the whole process of agency work very simple - I will be using them again in the event I return to agency work. Jon R August 2020

  • Excellent service. I have been registered with umbrella.co.uk since April 2020 as an agency nurse. I have found them efficient and professional throughout. I would recommend them to others based upon my positive experience with them K Howell July 2020

  • Service from Umbrella has always been prompt, friendly and efficient. G Evans June 2020

  • Umbrella's customer service has been quick, helpful and timely. They have also responded promptly to requests relating to delayed payments by my agency, ensuring that they advised on later cut off times which prevented delays. I would recommend the service. R Rodney June 2020

  • It’s been a great experience working through the Umbrella company, they have managed everything in a very professional manner and I would certainly recommend them Justin M June 2020

  • Very pleased with service offered by Umbrella. They responded to all my queries quickly and were always able to help. Clo June 2020