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Here at Brookson we’ve helped thousands of contractors make the important choice of choosing between a Limited company or Umbrella employment. Whether you’re new to contracting or need some advice on switching over, we’re here to help you decide between Umbrella Vs Limited.

To know the difference between Umbrella and Limited, you first must know what they are. Umbrella employment works between you and your client, where you essentially become the employee, submitting timesheets for your work. Once submitted you’re paid with National Insurance Contributions (NICs) and tax already sorted for you, removing the hassle.

Umbrella Vs Limited company

A Limited Company is an official business in your name which you’ll be legally in charge of while it being separate to you as an individual. You have much more control over your contracting career but a lot more responsibility.

Umbrella solution

An Umbrella solution and a Limited Company are suitable for contractors in different circumstances, it’s generally advised when you start a career in contracting to take advantage of an Umbrella company and then transition across to Limited. This gives you the opportunity to make sure contracting is right for you.

Umbrella is suitable for contractors that:

  • Earn £15 per hour or less
  • Are on shorter-term contracts
  • Don’t want to deal with paperwork and tax
  • Still want employee benefits such as holiday and sick pay

While Limited is suited for contractors who:

  • Earn more than £15 per hour
  • Plan to contract for more than half a year
  • Don’t mind the extra paperwork and responsibility
  • Take an initial hit on expenses


The infographic below goes into more detail on both working options and what you need to take into consideration.

Umbrella vs Limited Infographic explaining how they work, the differences and the benefits of both options

Umbrella provides you with employment benefits that you may find useful while contracting but is less tax efficient than Limited. Limited is the most tax efficient option but you have more responsibility.

Get in touch with us today for a FREE consultation! We’ll go through the entire process for you and ensure that you’re set up in a way that suits you.

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