Times are tough. Our economy seems to be hanging in there, but finances are certainly not as glorious as they were a decade ago! When every bit counts, it can be tough to see most of your income heading to the government.
It takes courage to be a contractor and not rely on a steady check from a permanent employer. Unfortunately, you are taxed more than a permanent employee making your earnings seem like the proverbial sand in a colander. And like the colander, your bank account will never be full if you continue to pay out most of your earnings.
What are your options? Is there anything you can legally do to increase your net pay?
When you choose to form a limited liability company, you commit to all the headaches of an endless amount of paperwork. You have to process your timesheets and expenses. You need to raise invoices and collect payments from third parties. You have to execute legal contracts, file and understand regulations. You have to calculate tax and National Insurance contributions.
For many, this time-consuming process can be avoided with an umbrella company or umbrella company alternative that utilises an employee benefit trust. All of the paperwork and associated headaches are taken care of so that you can focus on what you do best.
The Managed Service Company legislation made it more difficult for umbrella companies to increase net pay for contractors. In some cases, contractors were better off dealing with the hassles of paperwork. There are also typical charges when you use an umbrella company such as fees paid even if you aren’t currently under contract. Why should you have to pay fees if you are not working? Moreover, why should you pay fees for joining or leaving?
There’s another alternative. You can avoid time-consuming paperwork AND increase your net income. By utilising an employee benefit trust, a consultancy supply chain treats you as an employee and tackles all the paperwork and compliance issues. They fall outside the scope of MSC legislation, and for your client’s benefit, they also fall outside the scope of Transfer of Debts of Managed Service Companies.
The employee benefit trust is managed by the trustees with the sole interest of the employees. Your benefits include:
1. Average earnings retention of up to 85%+
2. No charges when you do not work
3. No charge to join or leave employment with Bedouin
4. Full employee status whether contracting in the UK or overseas
5. Fixed longer-term contractors can still participate
6. Professional Indemnity Cover (subject to confirmation of profession and placement indemnity requirements)
For more information on how you can benefit from a consultancy supply chain and obtain a higher net income, please contact The Bedouin Group.