Can I use an umbrella company even though I have a limited company?

No compliant umbrella company should be paying into a limited company; every umbrella company should be paying into your personal bank account as if you were a regular employee.

If your contract is determined to be outside of the IR35, you have the option to go via an umbrella company, or using a limited company directly and use the services of an accountancy firm. Always check the status of your assignment with the agency or end client providing it.

Unfortunately the myth that you can compliantly be paid the gross amount of your funds into your own limited company is rife, especially in the medical contracting community. When funds are paid out by an umbrella company, they must be paid as PAYE with all company and personal deductions made and listed on your payslip.

By paying into a limited company account, this only leaves the funds liable for company taxes to be deducted and so will double-tax your funds, leaving you out of pocket.  If an umbrella company offers to pay the gross amount of your funds into a limited company account, then this is non-compliant, and will lead to an investigation by HMRC who can look back up to 20 years of taxes. See a list of umbrella companies who have been proven to be running tax avoidance schemes here.

Churchill Knight are SafeRec certified so all contractors will receive an audited report of each payslip produced externally to ensure complete compliance and transparency.

To request a tailored illustration for your take-home pay, please contact us using the form on this page or call our experienced sales professionals today on 01707 871622.