Many people in the UK work through an Umbrella company. This type of company is a great way to bridge the gap between being your own boss and being an employee. You can have the flexibility of being your own boss without the hassles of dealing with the tax man. As an employee, you’ll have the same benefits as a permanent employee, but with an Umbrella company, you won’t have to worry about paying your own margin.
An Umbrella company acts as a third-party between you and a recruitment agency. It gives you a full employment contract, pays you the right tax and National Insurance contributions, and receives your earnings from your recruitment agency or end client after deducting any PAYE taxes. Some umbrella companies also offer discounted financial advice to their workers. You can compare different umbrella companies and decide which one best fits your needs. Keep these tips in mind when looking for an Umbrella company.
Make sure to choose a company that offers 24/7 customer support. The best umbrella companies are fully compliant with HMRC rules and regulations, and have accreditations from the FCSA and Professional Passport. Make sure your Umbrella company offers a bespoke payslip and payment illustration. If your Umbrella company doesn’t offer this, you’re likely to pay a lot more than you actually deserve. You’ll never know when you’ll be in need of a payout!
The benefits of working through an Umbrella company are many. You get to submit timesheets online, and the Umbrella company pays your employee’s statutory expenses. The company also pays the contractor’s annual leave. Unlike traditional contracts, an Umbrella company pays you for all the expenses that your contractor would have incurred on their own. They also handle tax collection, so you’ll receive the income tax and NI you’re legally entitled to. Aside from the tax benefits you’ll get, the benefits of using an Umbrella company are that it’s hassle-free.
Some people think that umbrella companies only provide limited services. This is true to a certain extent. They provide benefits and pay employees, but their services aren’t comprehensive. Umbrella companies also facilitate project-based staffing. Umbrella companies can also provide expert consultants for a company, and they can work for them indefinitely. In some cases, the services of an Umbrella company can even be international. So make sure you choose the right company for your needs.
When choosing an Umbrella company, it’s important to choose one that has a history in the industry and is highly rated in independent online review sites. Check the company’s reviews on specialist contractor portals and forums to see how others have rated them. Ensure the company you choose has a good track record and is quick to respond to your queries. You can also ask for references from other contractors who have used an Umbrella company. Their experiences will help you choose the best one for your needs.
Besides being more flexible, umbrella companies are often incompatible with traditional employment relationships. Because they are based on freelancers, they cannot hire top talent for an indefinite period of time. Since they’re free to set their own hours, they’re not bound to a particular job or client. Similarly, they cannot be managed in the way traditional employees can. If this is the type of relationship you’re looking for, you’d be wise to look for another alternative.