Can I use an umbrella company when working inside IR35?

Yes, you can use an umbrella company when working inside IR35. Using an umbrella company for your payroll is often the easiest way to get paid as a contractor or freelancer.

Can I use an umbrella company when working inside IR35?

An umbrella company is a great option if you are working inside IR35. If you’re inside IR35, you are operating as a permanent employee in the eyes of HMRC. Therefore, you cannot be paid gross and pay yourself with a combination of salary and dividends. Instead, you must be taxed via PAYE, and a net salary is paid to you. Umbrella companies offer a hassle-free way to get paid when working inside IR35 as they process your payment via PAYE, and all tax deductions are paid to HMRC on your behalf.

What are the benefits of using an umbrella company when working inside IR35?

There are many benefits of using an umbrella company when working inside IR35.

• You do not need to worry about IR35 – Using an umbrella company is a great option when working inside IR35 as you’ll be taxed at source (like a permanent employee) and are compliant with the legislation.
• Compliance with HMRC legislation and UK tax law—Every time you are paid, the correct tax deductions will be made to your pay and paid to HMRC on your behalf, provided you use a compliant umbrella company.
• Compliant payroll – You must only use a compliant umbrella company. To ensure your provider is compliant, you should look for the FCSA accreditation. Churchill Knight Umbrella is proud to be an FCSA-accredited member, and we believe this not only showcases our commitment to compliance but gives our employees complete peace of mind that they will be paid as per UK tax law and HMRC legislation.
• Continuity of employment – Your umbrella company will remain your sole employer throughout your employment with them. Continuity of employment allows you to work for different end clients at the same time or consecutively. Continuity of employment also helps when you apply for financial services such as a mortgage or loan.
• Minimal administration – Unlike running a limited company, very little administration is involved when you register with an umbrella company. All you need to do is submit the required documents and a weekly/monthly timesheet (if required).
• Insurance – As part of the umbrella service, you will be covered by Professional Indemnity Insurance, Employers Liability Insurance and Public Liability Insurance.
• Employee benefits – Becoming an employee of an umbrella company means you’ll have access to employee benefits such as Maternity Pay/Paternity Pay and Sick Pay. Please visit our dedicated page for more information about statutory payments.
• Low cost – The margin umbrella companies will deduct for their service costs much less than an accountant for a limited company. A weekly umbrella company margin will usually be between £15 – £30.

Churchill Knight Umbrella

Since we launched in 2017, we have quickly become one of the most popular umbrella companies in the UK. We help thousands of contractors and freelancers get paid every month. We have many happy clients, and we believe this is a testament to our customer service—why not check out our reviews to see for yourself?

We operate traditional PAYE umbrella payroll, but our service includes a load of extras—at no additional cost. These include £25 million insurance cover, Employee Benefits, Same-Day Faster Payments, no joining or leaving fees, and access to a dedicated Account Manager.

To find out more about our umbrella service, please call our friendly Sales Consultants on 01707 871622. You can also request a tailored take-home pay illustration or schedule a call for a time that suits you, and a member of the team will contact you.