Churchill Knight blog faqs umbrella company 2

What is an umbrella company? Contractor and Freelancer FAQs

Contracting via umbrella company is widely considered as being the easiest method for contractors and freelancers to get paid. There is less of an administrative burden than operating through a limited company and getting paid is a quick and efficient process. We are regularly asked about umbrella company payroll by contract and freelance workers. Here are the answers to the most common queries, including ‘what is an umbrella company?’

Claiming expenses through an umbrella company

Contractors working through umbrella companies were hit hard by changes in legislation concerning claiming expenses. Starting on the 6th April 2016, HMRC introduced legislation that significantly reduced the number of contractors able to claim tax relief on travel and subsistence expenses. In fact, contractors are automatically not considered for expense claims, unless they can prove they are entitled to them. Nevertheless, working through an umbrella company remains a popular choice for contractors and freelancers, especially those working in the public sector.

Churchill Knight blog benefits umbrella company 2

What are the benefits of working through an umbrella company?

Demand for umbrella companies appeared to be in decline after the removal of Travel and Subsistence expenses for a majority of contractors by HMRC in April 2016. However, with new legislative changes affecting off-payroll contractors in the public sector, commencing 6 April 2017, the demand for umbrella companies is on the rise again. Are you aware of the benefits available to contractors working through an umbrella company?