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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How an umbrella company helps contractors

What is an Umbrella Company?

An umbrella company is simply a ready-made ready-to-go limited company that contractors/temporary workers make use of while on contract.

It's the hassle free alternative to

  • Setting up and managing your own limited company or
  • Working directly for a recruitment agency

There are no long-term commitments and you only pay for the service when you are in work.

Your Own Back-Office Support

When you use an umbrella company there's none of the stresses of constant form-filling and paperwork that comes with running a limited company, nor the financial penalties of working directly through a recruitment agency.

An umbrella company gives you all the upsides like expert professional guidance, inclusive insurances and limited company status - it's a sophisticted administration service specifically designed for today's busy contractors.

Why Should Contractors use an Umbrella Company?

  • Takes just minutes to register - online or telephone
  • It's the hassle free way to work
  • If paperwork and administration are not your strength

Benefits of Using an Umbrella Company

  • Limited company status
  • Perks like, sick pay and maternity pay
  • A fully trained and qualified personal assistant
  • Your back office.

What Does an Umbrella Company do?

  • Takes responsibility for all paperwork and legal burdens
  • Raises invoices in the correct and proper way
  • Makes sure your money is paid on time with no delays
  • Calculates the right amount of tax you need to pay, provides a detailed payslip and transfers your pay to your personal bank
  • Deals with HMRC on your behalf in matters like
    • Tax
    • VAT
    • Statutory returns

    Umbrella company's fees vary greatly from one to another. The good news is that the umbrella company service is an allowable business expense, so if the umbrella company's gross fee is, say, £100 you only pay about £75 after tax.

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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.