close menu

Forget about umbrella, it’s time to move on to a limited company

by Kobus Van den Bergh | Nov 13, 2017
  • As a contractor in the UK, you’re going to have to decide how best to structure your earnings. Two of the most popular options are a limited company or an umbrella structure. If you’re earning around £200 per day, then your decision should be a no-brainer.

    Limited company, unlimited possibilities

    As an experienced contractor, there are many advantages to trading through a limited company structure. By setting up a limited company, you will benefit from:

    • Better take-home-pay
    • Increased earnings potential
    • Potential to grow an actual business

    Apart from these advantages, you will also have total control over all transactions and revenue streams of your limited company. Being a director or owning your company will mean you can receive dividends. When structured correctly, you won’t have to pay any National Insurance on your dividend earnings.

    See also: How long will it take me to set up a limited company?

    Putting your money where your tax was: Comparing umbrella and limited company take-home-pay

    If you earn at least £200 a day, you could be saving thousands of Pounds per year if you switch to using a limited company. Below is a table illustrating how much more money you will take home when you use a limited company structure.

    Daily rate

    Ltd co
    (net pay p/a)

    (net pay p/a)

    You take home an extra:

















    Closing the umbrella

    If you’re set up as an umbrella company, making the switch to a limited company isn’t as difficult as you might think. However, the timing is vital. The best time to switch to a limited company structure is between contract renewals.

    If you decide to register as a limited company mid-contract, your contract will need to be reviewed and altered. Your client or agent would also need to agree to the switch.

    Want to set up your limited company?

    Don’t go it alone

    You need to ensure that you consider your own unique circumstances and requirements before making a decision that will affect your finances. It’s hugely important for you to consult professional contractor accountants who specialise in this sector.

    With the right advice, you can be confident that whatever decision you make is the right one for you and your business.

    Give our accounting team a call on +44 (0) 20 7759 7530 or send us an email at for more information.

    We are a professional services company that specialises in cross-border financial and immigration advice and solutions.

    Our teams in the UK, South Africa and Australia can ensure that when you decide to move overseas, invest offshore or expand your business internationally, you’ll do so with the backing of experienced local experts.

    • Autumn-statement-banner-no-logo-white
      Highlights from the 2018 Autumn Statement
      Oct 30, 2018  |  by Scott Brown
    • man-in-front-of-shop
      A quick guide to UK business tax
      Oct 26, 2018  |  by Scott Brown
    • working-man-contractor
      Self-employment vs. contracting in the UK: What’s the difference?
      Oct 11, 2018  |  by Kobus Van den Bergh
    • growing-business
      Why your SME needs management accounting
      Oct 10, 2018  |  by Scott Brown
    • yes no cross tick
      HMRC’s employment status test continues to frustrate UK contractors
      Sep 24, 2018  |  by Kobus Van den Bergh
    • Money
      Leaving the UK? Get some extra cash by claiming your tax refund
      Sep 20, 2018  |  by Kobus Van den Bergh
    • Businessman-on-graph
      How you can stop worrying and learn to love outsourced accounting
      Aug 03, 2018  |  by Scott Brown
    • tax-deadlines
      Self Assessment deadline reminder! Second payment due end of July
      Jul 25, 2018  |  by Kobus Van den Bergh
    • magnifying-glass-contract
      IR35: Are you in or are you out?
      Jul 02, 2018  |  by Kobus Van den Bergh
    • Grabbing-money
      Don’t overpay on your tax! Make sure you’re on the right tax code
      Jun 28, 2018  |  by Kobus Van den Bergh

    South Africa

    Cape Town

    Regent Square
    Doncaster Road
    Kenilworth 7708 +27 (0) 21 657 2120


    201 The Annex
    Ridgeside Office Park
    Umhlanga +27 (0) 31 536 8843

    United Kingdom


    Castlewood House
    77/91 New Oxford Street
    WC1A 1DG +44 (0) 20 7759 7514


    5-7 Selsdon Road
    South Croydon
    CR2 6PU +44 (0) 20 7759 7581



    9 Yarra Street
    South Yarra
    VIC 3141 +613 (0) 8651 4500

    Sable International is a trading name of 1st Contact Money Limited (company number 07070528), registered in England and Wales. We are authorised and regulated by the Financial Conduct Authority in the UK (FCA no. 517570), the Financial Services Conduct Authority in South Africa (1st Contact Money [PTY] Ltd - FSP no. 41900) and hold an Australian Financial Services License issued by ASIC to deal in foreign exchange (1st Contact Group - AFS License number 335 126).

    Our site will be down for approximately 90 minutes on Saturday 17 November at 09:00 BST. 
    We're carrying out scheduled maintenance to ensure we continue to provide you with the service you've come to expect from us.
    This site uses cookies, read more or close this notice.