Contracting Terminology

An Umbrella Company is a company structure that you can step into while you Contract. Umbrella companies are usually managed by an accountancy firm (in this case Contracting PLUS).

The Umbrella Company is already VAT registered and insured. This offers you an easy to use and cost-effective solution to start contracting. There are no set up or close down costs. You can be registered into the Umbrella Company within a matter of hours.

Umbrella Companies offer a simple, hassle-free option for those who want or need to start working as Contractor immediately. Watch our video which explains How Umbrella Companies Work.

A Personal Limited Company is wholly owned and controlled by you. You can be the sole director and shareholder of the company, or you can have more than one shareholder if you choose. Contracting PLUS can assist you in setting up and managing your own Personal Limited Company.

A Personal Limited Company offers you greater flexibility than an Umbrella Company, allowing you to build wealth for the future, have more flexibility in managing your earnings, allows you to build a personal brand, and can be very tax efficient.

There are a number of legal responsibilities attached to owning a Personal Limited Company, Contracting PLUS can assist you with the set up and management to ensure you are compliant from the start. We will look after everything; company registration and set up, administration, paperwork, the accounts and your tax returns.

There is a legal difference between a contract of employment (known as a ‘contract of service’) and a contract for service. A contract of employment applies to an employee-employer relationship. A contract for service applies in the case of a business to business relationship which is the type of relationship you will have with your client when you are an independent self-employed contractor.

Day rate is the amount of money you will be paid daily for your contracted services.  Contractors work on average 230 days per year. This takes into account weekends, holiday days and bank holidays.

To calculate what your daily rate might be, use our daily rate calculator