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?
There are a variety of exciting advantages available to contractors who decide to work through an umbrella company. Read about some of the advantages of umbrella companies below, all of which are available to contractors who choose to contract through Churchill Knight Umbrella.
Umbrella companies are suitable for all contractors, but some in particular
Using an umbrella company is an easy solution for any contractor. However, there are some who are even more suited to an umbrella company than others, including:
- First time contractors looking to get a feel for self-employment, before they consider starting their own limited company (personal service company).
- Contractors who are earning less than £15 per hour.
- Contractors working on an assignment which is 3 months or less in length.
- Contractors working in the public sector.
- Contractors who do not want to, or are unable to be the director of their own limited company.
Signing up with an umbrella company is a breeze
The sign up process with an umbrella company is stress-free. You will be required to complete a registration form that will ask you for personal details and information regarding your assignment. It is likely that you will need to provide proof of your identity and address.
When the umbrella company has received your registration form and is happy with the details, you will then be required to sign a contract with them, which completes the sign up process.
You will only have a tiny bit of administration
It is generally accepted that working with an umbrella company is the easiest way to get paid as a contractor. Once you have completed the initial registration form and officially become an employee of the umbrella company, your weekly administration will only take an estimated 10-15 minutes. You will need to upload your signed timesheets to the umbrella company’s online portal, as well as sending a copy to your recruitment agency. If you are eligible to claim allowable expenses, you will need to upload the receipts to the umbrella company’s portal as well.
You will be entitled to Employee Benefits
When you work through an umbrella company, you become their employee because they are paying your wages via PAYE. Therefore, you will have access to the Employee Benefits that everyone in permanent employment is entitled to:
- Sick Pay
- Maternity Pay
- Paternity Pay
- Annual Leave
You will be contracting in full compliance with HMRC legislation
It is imperative that you choose an umbrella company that operates in full compliance with HMRC legislation, and who are regularly audited by industry professionals such as Professional Passport.
HMRC has stated they are continuously targeting contractors and service providers who are promoting tax evasion. When you Google search ‘umbrella company’, a selection of providers offer you the opportunity to take home 90% of your pay. These schemes are not approved by HMRC and using them could land you in a world of trouble.
You will be insured throughout your assignments
Industry leading and respected umbrella companies will provide you with insurances whilst working on your assignments, at no extra cost. These insurances include:
- Employers’ Liability Insurance
- Public Liability Insurance
- Professional Indemnity Insurance.
It’s easy and free to move away from an umbrella company
Joining an umbrella company is usually free and leaving is too. However, some umbrella companies are disorganised and the process of leaving can be unnecessarily drawn-out. When you select your desired provider, make sure they are well perceived in the industry and have positive customer reviews.
Have you considered whether the umbrella company you are looking at offers limited company accountancy for contractors as well? If starting your own limited company is something you are looking to do in the future, or you are keeping your options open, it’s a great idea to ensure you use a company that provides both services (like Churchill Knight). This is because the process of switching from umbrella to limited (and vice versa) will be incredibly straight forward, and no additional fees will be incurred.
Customer service is paramount
The umbrella company market is competitive and there are many providers who claim they are the best – you can use this to your advantage. When you are choosing an umbrella company, make sure you are assigned your own dedicated consultant who will act as your direct point of contact. This will make your life incredibly easy because you will be able to have your questions answered efficiently by a professional.
Make sure you give the umbrella company a call and speak with their consultants. You will be able to get a good feel for the company and their level of customer service by one simple phone call.
Churchill Knight Umbrella
If you would like to join Churchill Knight Umbrella or speak to one of our experts about your personal working circumstances, call us on 0808 2564647 or contact us here. You may find yourself torn between the limited company and umbrella company route to becoming a contractor, or you may require more information. Whatever your enquiry, we would be delighted to hear from you and provide you with the support you need.
Churchill Knight Umbrella operates in full compliance with HMRC legislation and offers all of the benefits listed above. Please contact us to find out more information.