What is the difference between Contractor Employment + and Limited Company?

16th July 2016

By Walker Smith’s Junior Account Manager, Rachel Whittle.

So you’re new to contracting.

You’ve negotiated your rate, you’ve reviewed your first contract, you’ve got the required skills and you’re now hearing talk about different payment methods, such as Limited company, self-employed and pay as you earn etc.

But what does that mean for you?

As a contractor, you have a few different options when it comes to how you can receive payments for completed agency work. Deciding on the most appropriate solution for you it can come down to:

  • The agencies preference
  • Your negotiated pay rate
  • Your intentions as a contract worker
  • The amount of control you may want to have over your finances.

With over 30 years industry experience, we appreciate that every contractor’s circumstance is different, which is why we ensure we have implemented the best processes and systems  for all our contractors and offer a choice of services to match your preferences and situation.

Understanding your options

Contractor Employment+

Contractor Employment + is our employed solution which gives contractors comfort in the knowledge that any invoicing, cash collection, reconciliations, holiday pay, payroll and reporting to HMRC is taken care of. As well as a load of extra benefits!

We work in partnership with BHSF to provide our contractors with a healthcare and benefits package to save you money whether that’s doing your weekly shop, getting a new filling at the dentist or making a claim should your injure yourself whilst on site.

Limited Company

Alternatively, the option of setting up as the Director of your own Limited Company may be something you want to explore.

This solution is perfect for contractors looking to develop their career whilst retaining flexibility and control when it comes to the hours they work, the amount they can earn, where they are based and who they choose to work with.

It also gives you to option to:

  1. Maximise your pay
  2. Claim back a wider range of business expenses
  3. Access the Flat Rate Vat Scheme
  4. Have the chance to develop a brand
  5. Build a business
  6. Separate your personal finances from your work finances
  7. Retain up to 85% of Gross Earnings.

And contrary to popular belief, with the right provider, running your own Limited Company isn’t as difficult as you may think.

But which one is right for me?

If you are looking to take on temporary contracts for a long term period of 6 months + and earning anywhere above £15p/hour, then the  option of setting up your own limited company is definitely something to consider. Becoming a Director of your own company brings certain responsibilities which we are happy to discuss with you further.

If you’re working on a contract basis whilst looking for your next permanent placement, or if you’re under direct supervision, direction and control from you onsite manager then Contractor Employment+ may be the best route. If you’re not looking to claim for expenses, or if you’re not able to do so due to the nature of the role you’re carrying out then CE+ would also be an option for you.

If you’re still unsure about which option suits you the best, then speak to a member of our customer care team today on 0161 359 3235 for a FREE consultation. Alternatively, drop an email over to [email protected] and we’ll get straight back to you!