Contractors in IT, engineering, energy and other technical fields often earn well, but they carry all the responsibility for their own tax and structure. Two questions shape almost everything: how you trade, through your own company or an umbrella, and whether a given contract sits inside or outside the off-payroll (IR35) rules. We help you make sense of both.
Limited company or umbrella, which is right for me?
Most contractors work in one of two ways. With your own limited company you are the director, you decide how to pay yourself and you can often be more tax-efficient, but you take on the admin and the compliance that comes with it. Through an umbrella company you become its employee, it runs PAYE and deductions for you, and your take-home is simpler to understand but usually lower.
The right choice depends on your contracts, how long you expect to keep contracting, whether your work falls inside IR35 and how much admin you are happy to take on. Neither wins every time, so we look at your situation and lay out the trade-offs plainly.
Two routes, different trade-offs
Your own limited company
More control and often more tax-efficient, with the responsibilities of a director. See how we help limited companies.
Umbrella employment
The umbrella runs PAYE and deductions for you, the simplest to manage, with less to decide and less to gain.
What is IR35, and does it affect me?
IR35, now usually discussed as the off-payroll working rules, exists to test whether a contractor working through their own company is genuinely in business on their own account, or is really an employee of the client in all but name. If an engagement is judged to be "inside" IR35, it is taxed much like employment, which makes a big difference to your take-home pay.
In the public sector, and for medium and large private-sector clients, it is generally the client rather than the contractor who assesses the status of an engagement. For contracts with small clients, your own company may still need to make that assessment. The rules are detailed, they have changed over the years, and status turns on the specific facts of each engagement.
Expenses and take-home pay
When you work outside IR35 through your own company, legitimate business expenses reduce the profit you pay tax on. Depending on the arrangement, these can include certain business travel and subscriptions, equipment, insurance and your accountancy fees, subject to the usual rule that a cost has to be spent for the business, and to the tighter restrictions that apply when a contract is inside IR35.
What you can claim, and how you are best paid, whether salary, dividends or a mix, depends on your structure and your status, which is exactly why generic online calculators can mislead you. We work it out on your real figures and keep you on the right side of the rules.
How we help contractors
Company running costs handled
Accounts, Corporation Tax and filings managed so your company stays compliant.
Learn moreDirector payroll & dividends
A tax-efficient pay structure set up and run through payroll, with proper dividend paperwork.
Learn moreIR35 awareness
We help you understand status, keep clean records and bring in a specialist review where it is needed.
Your personal tax
Your Self Assessment prepared and filed alongside the company accounts.
Learn moreBetween contracts and when things change
Contracting is rarely a straight line. You might face a gap between engagements, a contract that changes status partway through, or a decision about whether to keep the company ticking over during a quiet spell. Each of these has tax consequences, and the sensible move depends on how long the gap is and what comes next. We are on hand to advise at each turning point, rather than leaving you to guess.
Getting set up as a contractor
Review your contracts and goals
We look at your work, your likely IR35 position and how long you plan to keep contracting.
Choose and set up the structure
We help you decide between a company and an umbrella, then get the chosen route running.
Run it tax-efficiently
We handle the compliance, structure your pay sensibly and keep you informed as the rules change.