Menu

Head to head. Let’s see how the David v Goliath contenders match up in terms of compliance, remuneration and usability.

Compliance and political meddling
Whilst HM Government and HMRC continue to exercise their pincer movement on PSCs (so that’s grabbing more tax on one flank and upgrading IR35 on the other) many contractors, including some in the public sector, are choosing to operate on a mutual basis, meaning that employees can be rewarded without the shadow of HMRC counter avoidance lurking in the background.

Verdict – The direction of travel, as I’m sure you’ll agree, is against limited company.

Remuneration and reward
Neck and neck (in terms of pay rates) is perhaps the fairest way to describe the value of packages available to limited company and also to mutual workers. Limited company slightly edges it if a worker has a really substantial profile of business expenses, but then again, for anybody contracting overseas or for those with more ordinary expenses, then mutual takes the gold medal, both in terms of productivity and worker support. So, it’s pretty much equal in terms of remuneration, but who wants to manage their own accounts and tax deductions if someone else can do it all for you legally?

Verdict – Honours even here, but scope for moving one way or the other, depending on personal circumstances and sometimes the contractual chain.

Flexibility and real world pragmatism
As we know, stuff happens, particularly in the world of flexible working, where corporate objectives and budgets change quickly, and contractors usually bear the brunt of short-term decision making.

So unless you fulfil the following criteria, then try and keep an open mind:

  • If you’re married to an accountant (you’ll probably be married to a limited company too)
  • You take irrational comfort from your company’s weekly or monthly accounting direct debit fee
  • Or if you don’t mind your personal data being featured on the 1st page of most search engine generated results, thanks to the new Companies House Beta algorithm https://beta.companieshouse.gov.uk/

Luckily at Appytech, we take a pragmatic view of limited company, umbrella and alternatives such as working mutually, so we’re able to analyze contracts and numbers and then provide a balanced view of the options available.

We’re also tuned into both HM Treasury’s upcoming legislative diary and HMRC’s latest published interpretation, so we’re happy to guide worker, advisor and even the odd mentor.

To learn more about our approach to contractor reward and remuneration take a look around our site and see exactly how we’re shaking up the payroll industry.

Posted in Limited, Umbrella On September 7, 2016