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First time contractor - PLC or Umbrella?

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  • 12-12-2017 7:43pm
    #1
    Cona
    Closed Accounts Posts: 591 ✭✭✭


    Guys, apologies if this has been posted before but I've read every thread so far and am still confused.

    Basically I am going out as a contractor and am trying to decide between umbrella or PLC. Now I have heard all the points of each but I can't decide.

    - Umbrella company seems easier to setup and deal with, manage only thing stopping me is it will potentially cost me more money...?..

    - how much would I save if I setup a PLC assuming this is the most tax efficient way versus an Umbrella? I understand there is more upfront costs with the PLC...

    - is there any difference with getting paid when using an umbrella vs PLC? I've heard some stories around PLC being paid late for work done? I would be going through an agency for the client (client usses this agency a lot) so I assume this is irrelevant here?

    Just really trying to understand how much tax efficiency I will achieve by going the PLC versus umbrella???

    Thanks for the advice!


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    #2
    sysprogrammer
    Registered Users Posts: 224 ✭✭sysprogrammer


    personally, I setup a ltd company and hired an accountant for a few hundred a year.
    As I was getting paid monthly , my accountant only had to send 12 invoices and tidy up any tax payments.

    this worked out far cheaper in terms of charges, and also I benefited from the extra savings you can enjoy while having your own ltd company.

    now that things have expanded somewhat , I have a great relationship with my accountant who has been there from the start.

    That was my experience, and for a few months at the beginning I used the Umbrella company provided by my agency.
    They (the umbrella comp) would make a bit of a fuss over expenses or sorting out various issues.
    An Accountant was far easier and now I simply send him a whatsapp with any questions I might have, great service.

    hth,
    Sys


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    #3
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    If you expect to be contracting long-term, Limited company is slightly cheaper.

    If you're testing out contracting for the first time, umbrella company is tidier. You have the option to walk away at the end of the contract without and ongoing responsibilities.

    Most agencies will have no problem switching from umbrella to Limited if you want to see how the contract goes before committing.


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    #4
    L.Jenkins
    Moderators, Computer Games Moderators, Technology & Internet Moderators Posts: 19,240 Mod ✭✭✭✭L.Jenkins


    Graham wrote: »
    If you expect to be contracting long-term, Limited company is slightly cheaper.

    If you're testing out contracting for the first time, umbrella company is tidier. You have the option to walk away at the end of the contract without and ongoing responsibilities.

    Most agencies will have no problem switching from umbrella to Limited if you want to see how the contract goes before committing.

    Depending on the daily rate, it's a toss up between LTD and PAYE. Anything greater than €300 per day would be suited to LTD services.


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