There's definitely two camps of contractors. Those who trade using an Umbrella company and those who prefer to run their own limited company.

‘Umbrellas' are a fairly recent innovation, coming onto the contracting scene around eight years ago. They were developed in line with the needs of modern day contractors - who were fed up with doing a full days contracting work then having to sit in front of their computers all night filling in spreadsheets and forms.

Running your own limited company may sound good, and being a ‘director' carries a certain amount of kudos, however, behind the façade does lie an endless stream of administration and paperwork that has to be completed to certain minimum standards and within strict time deadlines.

Being the boss of your own limited company actually involves you knowing a fair amount about spreadsheets, invoicing and contracts - as an absolute minimum. If you don't have the discipline and resources to commit to substantial ‘out of hours' work, then it would be best not to even start.

An Umbrella company, on the other hand, is specifically designed to address the concerns of contractors who do not want the hassle or imposition of having additional responsibilities outside of their contract work.

The only form an Umbrella contractor has to fill out is their timesheet. Once this part is completed the Umbrella company does everything else.

• Have had training
• Are an accountant
• Enjoy administration & paperwork
• Understand complex forms
• Have nothing better to do of an evening or weekend than complete forms
• Believe biros will never replace fountain pens

• Want someone else to do all your work for you