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Limited Company Advantages

If you are contracting for more than 3 months, or it is your aim to contract for the foreseeable future then the limited company route is the best way to go.

By contracting through your own limited company you are much more tax efficient, giving you more money in your pocket.

We understand that everyone's circumstances can be different so call us today for a free personal business review before you make any decision.

Below are the answers to some common questions we get asked in reference to Umbrella Companies and the advantages you can get from running your own limited company. You can find more of these on our FAQs page or feel free to call or email us to discuss any further questions you may have: 0845 834 0269 or

If there are limited company advantages then why do recruitment agencies tell me to use an Umbrella Company?

Contractors are often advised by recruitment and job agencies to use a Umbrella Company, this is because the agency is earning a very healthy commission from the Umbrella Company for referring you to them. The figures below speak for themselves, Umbrella Company route = much less money in your pocket.

If I contract through my own limited company how will this effect my take home pay?

If you are contracting through your own limited company your take home pay will be anywhere between 80% - 85% of the contract value.

If you contract through an umbrella company then your take home will be around 60% - 65% of the contract value.

For a full personal breakdown, take a look at our Calculators page

Is there a lot of paperwork involved in running a limited company?

Paperwork for a limited company will take no more than 15 – 20 minutes per month. This includes sending invoices, recording expenses and paying HM Revenue and Customs, if you choose to use an Umbrella Company, it will take roughly the same amount of time but cost you a lot more money.

Are there any set-up fees or a long contract with The 123 Way?

The simple answer is NO. There are no set-up fees, no contract and no tie-ins. You are free to leave The 123 Way when ever you like - though we're confident that our service will make you want to stay. We ask only for one months notice if you intend to leave, this ensures a smooth handover process.

If I stop contracting for a while do I still have to pay the monthly fee?

Our monthly fee of £80.00 + vat is the yearly fee divided by 12 - therefore if you do not contract for a month or two you still have to pay our monthly fee. If you decide to take a longer break from contracting then we can make your limited company "Dormant" and there will be no monthly fee to pay until you decide to begin contracting again.

How do I move from contracting through an Umbrella Company to my own limited company?

You can move from contracting through an Umbrella to your own limited company in no time at all. All you need do is:

1. Fill out the Join The 123 Way form

2. Give notice to your Umbrella Company that you are leaving - quick phone call is sufficient.

3. Inform your clients you will be trading through your own limited company from now on.

4. We will form your limited company for you

5. We will help you open a business bank account

6. Now you can contract through your limited company and we will be with you every step of the way with unlimited support.

It really is very quick and easy!

If you have any further questions, please call us on 0845 834 0269 or email


This information is for general information only. We take no responsibility for any action taken or refrained from in consequence of its contents. Always seek our professional advice specific to your circumstances before acting.