It also allows you the flexibility to undertake ad-hoc work for another vendor should you wish to do so. Credibility and flexibility: Having a limited company with a trading name can enhance your standing when applying for new assignments.If you are on a high tax rate it is possible to leave money in the company account for a period of time so that it can be drawn later at a lower tax rate. You decide how you want to be paid: Being self-employed you will pay yourself a salary.Total control: As a Director of your own company, you have total control over all transaction and revenue, including the handling of invoicing.Should you set up a limited company? Pros of using a limited company There is no one-size-fits-all approach so we recommend that you seek independent financial advice tailored to your own individual circumstances to help you make your mind up on what works best for you.
Rather than push you in one direction or the other, we’ve put together a list of pros and cons of Ltd vs PAYE in our best effort to remain impartial and only present you with the facts. There are a number of factors to consider, largely based on how much you earn and how much paperwork you are prepared to do, although these are not the only aspects to think about. Deciding between a limited company or PAYE (pay as you earn) is a question that often comes up when workers are thinking of becoming contractors for the first time or considering switching from one to the other due to a change in circumstances. Working as a contractor is different from being employed, so before you can take on a contract assignment in the UK, you will need to set up a way to get paid and meet your tax liabilities. As a recruitment agency that deals in contract jobs, we’re often asked which is better, PAYE or a limited company? Here we weigh up the pros and cons of each to help you decide which is right for you.
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