Employment Status

Are you a contractor? If you work for someone else, it is important to know whether you are working for that person in an employed capacity or in a self-employed capacity as an independent contractor.

Your employment status will determine the charge to tax on income from your employment or self-employment. It will also determine the class of NICs, which are to be paid.

Umbrella Companies employ you for tax purposes and complete central returns for all their contractors. It's less hassle and more flexible for you but take home pay is typically less than that the limited company option.

The best option for you depends on your plans, 'one off' contract or 'contractor for life'? [Read More...]

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Contractor Professional Relationships Umbrella Company Benefits

Contractor Professional Relationships

It's important to handle your professional relationships well, as a freelance contractor. Here are a few tips for the professional ones.

The Recruitment Agency

Recruitment agents are vital for a freelance contractor to sustain a successful contracting career. The recruitment agent will be largely responsible for finding your first then on-going contract roles.

The recruitment agency has a relationship with the client, and is responsible for finding suitable contractors to complete specific tasks the client may have. It is the recruitment agent that advises and negotiates the contract role's hourly/daily rate with the client for each job.

Your recruitment agency will have a contractual relationship with your umbrella company, in which you are the person named to fulfil the role.

The Client

You do not have a direct contractual relationship with your client as an individual. Your client has a contractual relationship with your umbrella company in which you are the named person to fulfil the role.

Though your contractual relationship is one-step removed, you obviously have an on-going working relationship with your client - which is the most important of all.

The Umbrella Company

When you register for the services of an umbrella company service, you actually become an employee of your umbrella company. The umbrella company will have a contractual relationship with your recruitment agency and your client - in which you are the named person to fulfil the role.

Once you have done the work how do you get paid?

  1. Send your time sheet to the umbrella company
  2. That enables the umbrella company to invoice your recruitment
  3. In turn the recruitment agency will invoice the client
  4. The client will pay your recruitment agency
  5. The recruitment agency will pay your umbrella company
  6. Your umbrella company will pay you.

Are you ready to go umbrella? Use our umbrella company comparison calculator and compare prices, reviews and view a personal take home pay example.

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HMRC Compliance

It's the basics... Compliance with Tax, VAT, PAYE and fiscal arrangements is mandatory for contractors regardless of whether you use an umbrella company or your own limited company.

Incredible then that there are still rogue umbrella companies and limited company accountants who expose their contractors to fraud. Umbrella Compare provides THE solution, we thoroughly vet all umbrella companies and limited company accountants that we list [Read more...].

Umbrella Compare provides a holistic overview of contracting with the aim of helping new and old contractors find the right payroll solutions. Contracting should be about focusing on the contract, not payroll, accounting, HMRC and bureaucracy.