When you register with Athona, choosing whether to become a Pay As You Earn (PAYE), Umbrella or Limited Company worker may seem complicated at first – that’s why we’ve broken things down so you can choose what’s best for you.

Limited Company Workers
If you choose a limited company, you will need to set up your own company, which Athona will then make payment to. Depending on whether you work for the NHS or private sector or if your placement falls inside or outside of the IR35 legislation, Athona may be required to deduct tax and NI, and make payment to the HMRC, on your behalf. However, you will still be responsible for submitting end of year accounts, which usually require the assistance of an accountant.

Umbrella Workers
An umbrella company can manage your tax and NI for a small fee. This may benefit those who work through multiple agencies.

PAYE Workers
If you choose PAYE, Athona will deal with all of your tax and National Insurance (NI) needs – we will even make payments to HMRC on your behalf.

It’s up to you which option suits you best, but below are some pros and cons of each choice to help guide you:

Limited Company
The most common limited company structure is a ‘Personal Service Company’, this arrangement is commonplace among freelancers.

Pros

  • 20% corporation tax on all earnings
  • Flat rate VAT system
  • Control over self-payment and withdrawals if outside of IR35
  • Option to claim expenses.

Cons

  • Setup and admin charges apply
  • IR35 legislation may apply*
  • Responsibility for VAT submissions to HMRC
  • Responsibility for PAYE submissions to HMRC if outside of IR35
  • Personal financial information, as well as your name and address, will be publicly available from Companies House.

* Depending on your contract, IR35 may apply to you. If you are working for a public body and IR35 does apply, Athona will be required to deduct the relevant tax and NI, and submit this to HMRC, on your behalf. Alternatively, if you are deemed to be working outside of IR35 you must handle your PAYE and NI yourself, rather than the body that is paying you.


Umbrella Company

Umbrella companies’ act as the employer for those hired by agencies and will ensure your taxation and national insurance obligations are taken care of. Choosing this option would essentially make you an employee of the umbrella company.

Pros

  • Your tax and NI will be organised for you
  • No personal responsibility for accounting
  • Full employment rights, including holiday allowances and sick pay
  • Payslips are provided.

Cons

  • Regular income tax rates apply
  • Inflexible pay date – this will depend on the company’s own policy
  • Normally charge for their services.

Take a look at our preferred suppliers: Umbrella.co.uk, Key Portfolio, RACS and Liberty Bishop.


PAYE

With PAYE, in effect, you will become an employee of Athona. This means our payroll department handles your taxation and NI contributions, as well as providing you with a payslip for your records.

What’s more, if you ever have any enquiries or concerns regarding your work or pay, this can be handled under one roof – providing seamless continuity to our services. We also do not charge a fee and there’s minimal setup required.

To find out more details or to discuss any of these options further, get in contact with your recruitment consultant today on 01277 217777.