You might think that Umbrella Companies are always stronger than limited companies but there are some some situations where contractors are better off using a limited company. Generally contractors is who are earning a high day rate, say the £300 per day and up, will be better off financially if they use an Limited company. Now this is only suitable for people who don’t mind the administration duties that go along with running a limited company. Anyone who is on a shorter contract or that earns less than £300 per day then an umbrella company is definitely the stronger of the two. This is due to the fact that you don’t have to set up PAYE scheme, get the VAT applications in and if you’re only going to be trading for a couple of months and then closing it, you will occur some costs along the way for this.