Registered yesterday - In Cheshire
I am now the proud Owner and CEO of a private Limited Company called 'Jungleboy'
How did this happen? Well.. eh.. pretty fast.
Tuesday I got the job at Revenue Scotland. The recruitment agency who sourced it is not an Umbrella Company. So they advised that I was to contact PayStream. They offer Umbrella and Limited Company services.
What does that mean?
When you are a contractor at a company or organisation, somebody will need to pay you. Now this can be done in 3 ways.
How did this happen? Well.. eh.. pretty fast.
Tuesday I got the job at Revenue Scotland. The recruitment agency who sourced it is not an Umbrella Company. So they advised that I was to contact PayStream. They offer Umbrella and Limited Company services.
What does that mean?
When you are a contractor at a company or organisation, somebody will need to pay you. Now this can be done in 3 ways.
PAYE, Umbrella or Limited Company.
The first : PAYE or Pay As You Earn, Is when you are directly employed with the company that hired you. You become their employee and they pay you a wage and do all the required taxes in the background, you get to take home a NET wage minus the taxes and Pension payments.
Umbrella is similar to this - however you become an employee of a different company, who in turn hires you out to their client (the original hiring company)
You are in effect an independent contractor and the umbrella company will take care of the tax and wages you are paid. This means you pay TAX on your earnings over the Threshold set by the HMRC (Tax Office).
A private Limited Company is where you as an individual set up a business. In this instance I named mine 'Jungleboy'.
In effect I am now the proud owner and CEO of Jungleboy Limited Company. I will be hired by Revenue Scotland as a contractor and they will pay the contractor's daily wage into my Jungleboy Business Bank Account. From there I have instructed my accountants (i.e. PaySytream) - who will have access to that account, to provide me with my personal wage and dividends from my company. (which is owned 100% by me) - For that service the accountants get a set fee. They will also keep in this acccount all monies that will eventually need to be paid in tax.
What does that mean for the earnings? A lot. I get more NET money and will be able to declare business expenses and work travel against VAT.
My personal earnings are divided into a Wage portion and a Dividend portion.
Clever people those accountants.
The first : PAYE or Pay As You Earn, Is when you are directly employed with the company that hired you. You become their employee and they pay you a wage and do all the required taxes in the background, you get to take home a NET wage minus the taxes and Pension payments.
Umbrella is similar to this - however you become an employee of a different company, who in turn hires you out to their client (the original hiring company)
You are in effect an independent contractor and the umbrella company will take care of the tax and wages you are paid. This means you pay TAX on your earnings over the Threshold set by the HMRC (Tax Office).
A private Limited Company is where you as an individual set up a business. In this instance I named mine 'Jungleboy'.
In effect I am now the proud owner and CEO of Jungleboy Limited Company. I will be hired by Revenue Scotland as a contractor and they will pay the contractor's daily wage into my Jungleboy Business Bank Account. From there I have instructed my accountants (i.e. PaySytream) - who will have access to that account, to provide me with my personal wage and dividends from my company. (which is owned 100% by me) - For that service the accountants get a set fee. They will also keep in this acccount all monies that will eventually need to be paid in tax.
What does that mean for the earnings? A lot. I get more NET money and will be able to declare business expenses and work travel against VAT.
My personal earnings are divided into a Wage portion and a Dividend portion.
Clever people those accountants.
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