What is a Limited Company?
A Limited Company also known as a ‘Personal Services Company (PSC)’ is typically a company formed and used by either an individual or a small group of individuals such as contractors, consultants or self-employed workers. The PSC will provide their professional services to an end client or agency which has the following benefits:
Contractor – tax efficient payments via salary and dividends in turn helping contractors to remain competitive in the contracting market
End clients/agencies – reduced risk of contract for services and employment tribunals direct with the contractor (as the PSC is engaged or an intermediary involved) adding another chain into the supply
How does Limited Company Payroll work?
- Your agency place you on a temporary assignment with your end client
- If you would like to provide your services as a limited company we would need to complete a Supervision, Direction and Control (SDC) questionnaire or liaise with your client and agency directly to confirm your IR35 status.
- You submit your hours and expenses (if eligible)
- We raise an invoice to your agency
- Your client sends payment to us
- Your payment is processed in the most tax-efficient way.
- Depending on the sector that you supply your services to, we may have to apply a percentage deduction to your income and remit that to HMRC in line with the Construction Industry Scheme (CIS). All services supplied to the construction industry are subject to their own tax treatment. If you are not supplying services to the construction industry, you will be responsible for paying your contractor taxes to HMRC when it is due.
- Payments are sent to your nominated bank account. You will receive text message confirmation of your payment.
If you already have your own limited company but prefer the security of trading via a staffing business, We can help. By invoicing your client on your behalf, we will ensure that administrative tasks do not delay your payments, as well as correctly identifying whether your current assignment is Inside IR35. We will give you the peace of mind that you are fully compliant.