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Tax Whether To Work Ltd Or PAYE

There are 3 main ways of being paid:

PAYE

Most agency workers work on this basis, employed by the agency you will be paid weekly, and the agency will deduct National Insurance and Income Tax, paying you a net wage directly into your bank account, providing you with a Payslip showing deductions.

Ltd Company

If you have expenses or are temping for a long period, you may decide to set up your own Ltd Company. Your Certificate of Incorporation and VAT number (if you have one) will be required by the agency. This usually provides you with a way of claiming expenses, mitigating some of the tax you would pay.

Useful site on how to set up a Ltd company :
http://www.hmrc.gov.uk/startingup/index.htm

Umbrella

Similar to having your own Ltd company, but less hassle and paperwork and including initial outlay, F4P can provide details of an umbrella company to enable you to work on a Ltd company basis where again you can claim some expenses, mitigating the tax outlay, effectively earning higher net income.