Health and Social Care Consultant

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Advantages of becoming a Health and Social Care Consultant

As well as offering a flexible employment solution for organisations and councils, locum health and social care consultants can implement change and potentially rejuvenate areas in a short space of time.

There are many advantages to becoming a contractor, including:

• Higher take-home pay - as a contractor you can easily command higher rates than as a permanent employee – this is due to the fact that companies do not have to pay for your National Insurance and any additional perks that permanent employees receive.
• Industry expert – your clients will view you differently and so you will be treated differently. Rather than your boss considering you a number within the company, just an employee, you are bought into the company as the skilled expert.
• Working in a variety of sectors and roles - as a contractor you have the choice to test out various other roles and sectors which will not only enhance your personal development but provide you with a wide-ranging set of skills in your CV.
• Lucrative long or short term contracts – quite simply, as a contractor you can pick and choose how long and where you work. In Caroola’s latest contractor attitude survey over 90% of those surveyed said that they had a better work-life balance as a contractor than as a permanent employee.

For a more comprehensive guide on the pros and cons of working as a contractor then please visit our benefits of contracting page.

Once you have secured your first contract you will then need to decide on the most tax-efficient way of operating.

Limited Company or Umbrella Company?

The two most common ways to operate as a contractor is as a director of your own limited company or by using the services of an umbrella company. Naturally, there are various factors to consider before making that decision, such as:

• How much will you be taking home from your contract?
• How long will you be contracting for?
• Are you happy to handle your own administrative work?

Contracting through an umbrella company means you will essentially become an employee of that company - they will pay your salary to you with tax and national insurance deducted. Umbrella companies are easy to use and provide an ideal option to those that are only going to be contracting for a short time (usually 3 months or less) and only expect to be taking home around £25,000 a year. Using an umbrella company however can be the most expensive way of contracting because your salary is subject to full PAYE tax deductions and National Insurance contributions - the same way that a full-time employee would be.

Working through your own limited company is the most tax efficient way to operate and is recommended to those expecting to earn £25,000 or more annually. Through your own limited company, you can expect to take home between 75% to 80% of your contract rate, as opposed to approximately 60% to 65% if you were working through an umbrella company. Visit our contractor calculator page and simply enter your expected daily or hourly rate to see how much, on average, you could take home through your own limited company.

Working through a limited company also gives you the added benefit of being able to claim business costs such as accountancy fees, travel etc. as a company expense, which is exempt from tax. With a limited company, there is a small amount of paperwork you will incur, however, our 15,000 clients tell us on average this takes them only a few minutes per month.

Naturally, there are pros and cons to both styles of contracting, for a more comprehensive understanding, visit our limited company vs umbrella company guide for more information.

If you have decided that working as a limited company contractor is the right option for you, or if you have previously used the services of an umbrella company and think that going limited will be more beneficial, then you will be pleased to find out that forming a limited company is probably much simpler than you think.

Forming a Limited Company

Forming a limited company is surprisingly straightforward and takes just a few easy steps:

• The first thing you need to decide is your company name. Check if your company name is available by checking out online.
• Once you have your company name, simply checkout online, which takes approximately 5 minutes.
• It will take approximately three hours (during regular business hours) for the formation to pass through Companies House and then you can start trading.

Our limited company formation package is designed to make forming your company as straightforward as possible. Our package includes; organising your business bank application details, VAT and PAYE registration information and advice on the optimum share structure of your company.

When forming a limited company, it is essential to ensure that you are forming a genuine limited company as there are lots of marketing operations in place that claim to be able to reduce your tax bill considerably. Remember, if it sounds too good to be true then it probably is.

However tempting these schemes may seem to remember that if you are working in the UK then you should be paying tax in the UK. For more information about these procedures and the potential risks involved please visit our article on offshore schemes.

To ensure that you are making the most of the benefits available to you it is a good idea to appoint an accountant to look after your accounts.

Choosing an Accountant

Finding the right accountant is essential as it could save you time and money. When choosing an accountant, it's important to check if they are qualified by an accredited accountancy body and that they are contractor specialists.

Our useful benefits of having an accountant guide provides a detailed breakdown on exactly what the benefits are of having an accountant and how they can ensure you are working in the most tax efficient way possible.

Contact Caroola

If you would like to make the change to working as a Health and Social Care Consultant contractor then our New Client Services team would be happy to answer any questions that you may have on working as a contractor and forming your own limited company.