Ubrella vs Limited Company

RE: Ubrella vs Limited Company

nikki.mits — Mon, 21 Sep 2015 18:41:03 GMT

Hi there

I have been locuming for 3 months now. I was with an umbrella company for the first month but have since opened a limited company. I felt like I was paying a lot being with the umbrella company (aside from their fees) and it turns out I was paying employers AND employees NI. According to my accountant this is not illegal but they shouldn't really be doing that. However- they do provide convenience, but to me, nurses make so little as it is, I would rather do the admin and get the extra money (as a limited company you don't pay both). According to my accountant I would save about £2000 per year from not paying employer and employee NI.

Also another thing I did when I started locuming, is I contacted practices myself to organise work as opposed to using agencies (which take a % of what you earn). In this age where nurses are like gold dust, you don't need to be giving any of your earnings away.

Good luck

RE: Ubrella vs Limited Company

hazjemgre27 — Mon, 21 Sep 2015 15:48:15 GMT

Thanks for the information guys. I think an umbrella company is the way to go while I'm starting out. I've decided to continue in my practice for a few month then start locuming, just for more experience really.

Thanks again, very helpful!

RE: Ubrella vs Limited Company

Sal the 1st — Sun, 06 Sep 2015 20:56:09 GMT

[quote user="raceila"]

Quite a few practices will not use self employed locums so you may need to factor this into your decision. I use an umbrella company and it works fine for me. Can claim a lot of expenses through them too

[/quote]

and this is why some of them can't get locum nurses. I was self employed as a locum, did a free HMRC workshop that shows you how to work out and pay your tax/NI etc and how to set out invoices. It isn't that difficult - even I could manage it without problems and it meant that more of the money I worked hard to earn stayed with me rather than being paid to somebody else. The other way to do this without using an umbrella company is to go on the practice payroll for the length of your locum - that way your tax/NI is deducted at source and everybody is happy.

RE: Ubrella vs Limited Company

Rachel Woodcock — Sun, 06 Sep 2015 18:23:06 GMT

RE: Ubrella vs Limited Company

lbt — Sun, 06 Sep 2015 15:19:28 GMT

Thanks - that's helped me a lot with my decision - I'd actually forgotten about the self-employment route

RE: Ubrella vs Limited Company

Ruby115 — Sun, 06 Sep 2015 14:31:26 GMT

Hiya!

Nope!

I am self employed. Only really worth setting up a ltd company (because of the costs involved) if you're going to be earning 35k plus. But having said that you can claim more I think through tax than as a self employed.

I love it! I invoice weekly and all vets have been more than happy with this, some even paying before invoice or before my shifts even finished, lol!

Its scary at first as its down to you and only you, but if I can manage it, anyone can!

RE: Ubrella vs Limited Company

lbt — Sun, 06 Sep 2015 14:23:43 GMT

Hi Ruby115 - do you have to set up a limited company for the self-employment option or not necessary? Thanks!

RE: Ubrella vs Limited Company

Ruby115 — Sun, 06 Sep 2015 13:58:31 GMT

I am a self employed rvn. I have just done my tax return online with hmrc - it really is quite easy! I invoice my clients and they pay me directly. I then put a % of this straight into another account to cover my tax etc when it's due. You can claim lots this way, definitely more profitable.

Also - don't bother with vds - as far as I can make out (in the small print!) it just gives you advice were something to happen. I have my own indemnity insurance with a separate company.

I have also been advised to draw up a separate 'contract of services' for any employer to sign which basically says that I am self employed and am separate to the vets.

I havent encountered any problems doing it this way - with agencies, employers or payment.

Its whatever suits you!

RE: Ubrella vs Limited Company

lbt — Sun, 06 Sep 2015 13:42:21 GMT

Hi - I have been using an umbrella company for the past couple of years but now considering own limited company and am trying to find out more about the experience others have had with this - you can follow the thread here (quite a few views but no replies yet!): http://www.vetnurse.co.uk/f/5/t/28802.aspx

Basically the difference is the following (and if anyone can add to this please go ahead or if I'm wrong let me know):
1. UMBRELLA The umbrella service sets you up as one of their 'employees' - you sign a contract with them and they sign a contract with the client. On that basis they deal with receiving your salary from the client / recruitment agent and then paying you minus deductions. They provide you with a pay slip and take care of all your financial obligations such as PAYE, national insurance, pension, holiday pay etc. They add 20% VAT onto each invoice which can be a surprise to the client if they aren't used to umbrella service - this goes to the umbrella company for their VAT bill and you don't see any of it. They provide you with a P45 if you leave them ie to change umbrella service or take on a permanent role or set up your own limited company. Some umbrella services are more flexible than others. Often you have to chase them if payments from clients are late etc. You pay them to do this - often charged per weekly timesheet per client.

2. LIMITED COMPANY If you form your own limited company then you have the responsibility of confirming your contract with your client, sending invoices, receiving / chasing payments and then submitting your tax return and taking care of PAYE / NI etc etc. Plus whatever other costs ie if you use an accountant etc. But this can mean that some clinics won't employ you as their liability insurance doesn't cover you, so check with them about that. Also check what personal insurance you will then need ie own indemnity cover, or VDS cover http://www.veterinarydefencesociety.co.uk/public/vn.aspx

Some freelance / umbrella services will also assist you with setting up your own limed company - they charge you on a monthly basis to act as your accountants and take care of PAYE / NI etc. But do look around and investigate your options in setting up your own limed company and managing it on your own - I have found plenty of accountants who are significantly cheaper.

3. SELF-EMPLOYED (added this after Ruby115 post - thanks for that) - same as limited company ie you do it on your own as self-employed, must be good at managing your own finances and remembering tax deadlines etc ! Might get better tax breaks as limited company.

So … it depends if you are good with admin and have the time to deal with your own accounting … And how much you are willing to 'pay' per month for that side of things to be taken care of for you.