What services can I expect from an umbrella company?

Friday, 18 November 2011 01:01

What services can I expect from a contractor umbrella company?

You may have heard the term umbrella company before, but what exactly is it?

If you are working as a contractor, this type of service is essentially something that could be of assistance and make your professional life a little easier.

Simply put, rather than working directly for a recruitment business, an umbrella company will employ you thereby offering you payroll and administration services. This means that rather than you looking after your laborious paperwork, your umbrella company can do it for you.

After all, you most likely made the decision to work flexibly on temporary assignments, as a contractor, because you wanted to be your own boss. Alternatively, the motivation may have been the opportunity to dedicate more time to doing the job you love and at which you excel.

However, going it alone can be daunting.

This is where you may benefit from using an umbrella company which offers you the protection of being employed. The umbrella company will be responsible for calculating and deducting your PAYE and NI contributions and will obviously be responsible for returning the tax forms to HMRC.

Every time you start a new assignment, your umbrella company will contact the recruitment business or client to set up the payment process, meaning you only have to worry about being paid by one company. The umbrella company will also help you chase any overdue payments from recruitment businesses or clients

Furthermore, as an employee of the umbrella company, you do not need to worry about IR35 since you will pay tax at employed levels.

Best of all, such a company may even be able to boost your take-home pay by claiming tax relief on your allowable expenses.

As if all of this wasn't enough, because your payroll is carried out by your umbrella company, you could even find that agencies start to pay you more.

Whether you make a living through contracting or temporary work, you could find that these services are of benefit to you.

By taking the hassle out of contracting you can get on with focusing on the job you enjoy, rather than worrying about chasing up clients for money or making tricky tax deductions.

As a result, you could soon find that life as a contractor is just as good as you hoped it would be.

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