Joining an umbrella company is the easiest way to work as a freelancer or contractor. Simply click on the link below to calculate your take home pay by inputting your weekly/monthly income. The PAYE calculator will instantly estimate your net pay.
Find out what you could be taking home through Contractor Umbrella today!
Expenses and Umbrella Companies Post 6th April 2016: Please note as of 6th April 2016, no "compliant" umbrella company will be able to process non-chargeable expenses for tax relief purposes due to a change in Legislation included within the Finance Act 2016. Click here to find out more...
REMEMBER: The only difference you should see in any Take Home Pay figure is the margin retained by the umbrella company. If you have been offered a higher take home pay, take a moment to think how this might work in reality?
In the contracting world trusts have always been very popular with scheme providers who promise 80%-90% take home pay, mainly because they charge 8-12% of the contract value (over £1000 per month on £450 per day). The schemes operate like this - basically, they pay a small monthly retainer on which you will pay tax and NI contributions, the balance of the contract value will then be paid to a trust from which you can apply for loans upon which tax is only payable when the loan is repaid or written off. In theory it won't ever be repaid and won't ever be written off and, bob's your uncle, you don't pay any tax.
However, HMRC cottoned on to this a few years ago and now users of this type of scheme are being systematically investigated and receiving demands for unpaid tax, interest and penalties. The scheme operators typically used Employee Benefit Trusts, which have been found to be wholly artificial when operated for contractors, but we are now seeing Contractor Benefit Trusts being operated which appear to work in exactly the same way so no doubt HMRC will be moving onto them soon enough. So is it worth the risk?
One of the main question on contractors' minds is "How much money will I take home?". To explain how contractor pay is calculated, we must first answer the question; What is PAYE? Click here to find out more.