Umbrella company - What to look for

There are many benefits of using an umbrella company for your payroll:

• Compliance with UK tax law and HMRC legislation – Providing you use a compliant umbrella company, the correct tax deductions will be made to your pay and paid to HMRC on your behalf.
• Inside IR35 status determination – If you are deemed inside IR35, you do not need to worry about IR35 as you’ll be taxed at source, like a permanent employee (PAYE).
• Low cost – Umbrella companies will deduct a margin for their service, which is taken from your gross pay (before tax) and costs you a little less. A weekly margin is usually between £15 – £30, considerably less than that of a contractor accountant!
• Continuity of employment – Your umbrella company will remain your sole employer, allowing you to work for multiple clients. Continuity of employment also helps when you apply for financial services such as a loan or mortgage.
• Employee benefits – You’ll have access to employee benefits, including Sick Pay, Maternity Pay and Paternity Pay, just like a permanent employee.
• Insurance – Most compliant umbrella companies will provide free insurance cover (Professional Indemnity, Public Liability, and Employer’s Liability Insurance) as part of the service.
• Minimal administration – Unlike running a limited company, umbrella companies are a straightforward way to get paid, and once you have registered, there is very little ongoing administration (if any).