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...]
Aside from a one-man limited company, the umbrella company is the most popular business structure used by contractors and freelancers.
The last decade has seen the emergence of dozens of new umbrella company services, so it may seem a difficult task to select the right one for your business. Here are some tips on what to look out for when joining an umbrella company.
A reputable umbrella company will have a transparent fee structure, typically split between weekly or monthly billing. Some companies charge a percentage of your invoice value, which can become very expensive if you're a high earner.
How many existing clients does the umbrella company have, and are you able to view testimonials from any of them. Also, how long has the scheme been running for?
Many of the leading umbrella companies are 'preferred suppliers' to recruitment agencies, so chances are you may encouraged to join a select number of schemes. You are under no obligation to do so, and make sure you do your homework on any umbrella company you are contemplating signing up to and their benefits.
Most umbrella companies will offer public liability, employers' liability, and professional indemnity insurance cover as standard.
Watch our for phrases such as
in the marketing material issued by some umbrella companies. All umbrella schemes are taxed the same way, there are no exceptions to this rule.
Beware of schemes which charge sneaky entry and exit fees, or similar additional costs. Make sure you receive a full list of charges before signing up.
Given the widespread use of the web, you should seek a web-enabled umbrella scheme for ease of use. Everything from timesheet submission to claiming expenses can all be completed online these days. A good umbrella company will have a fully automated payroll system that you can use online. Good technology means that you get paid quicker, no handing around for delays while your umbrella company and agency manually complete invoices and paperwork.
For many contractors, good service is top of the list when it comes to choosing business services. You should get a 'feeling' about any schemes you contact, and you will find that many now offer money back guarantees and agreed response times to queries.
If you encounter problems with your current umbrella scheme operator, it isn't that difficult to change schemes, as most major schemes can easily handle the transient nature of contract workers.
By far the best way to select a good umbrella company is via recommendations from current contractor colleagues. Remembers its your choice, shop around and choose the umbrella company that works for you. Your Agency cannot force you to use a specific umbrella company as this is normally about thee agencies commission and not necessarily in your best interests.
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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.