3 ms·
That's not how it's been used: You set up an umbrella company with yourself as a shareholder You pay yourself minimum wage, thus paying little income tax and
by squiffsquiff 4y ago
That's not how it's been used:
You set up an umbrella company with yourself as a shareholder
You pay yourself minimum wage, thus paying little income tax and national insurance
You then pay yourself and any other shareholders a dividend based on profits but this is taxed at a much lower rate than employee income and without national insurance
Advanced players set up their umbrella company in another country where the company taxes are even lower
- 111615bd 4y agoAs far as I can tell, employing yourself via a limited company being cheaper is no longer true, contrary to what the turnkey company industry would like you to believe. With the higher rate for dividend tax being 33.75%, dividends that lead to a total income over 37700 are taxed at ~47% (dividend tax+corporation tax).
- djbebs 4y agoWhat's wrong with that?