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...]
Its a great offer but how Much Should you Pay for an Umbrella Company?
There isn't a hard and fast amount you should pay for the service provided by your umbrella company. There's a wide range of prices that umbrella companies will charge for their processing and all the other advantages - anything from £40 to well over £200 a month (excluding offers).
Make sure you know exactly what your umbrella company charges before you register with them, and always ask if the umbrella company has any extra charges. The basic price should be sufficient for turning your timesheet into cash. This type of question will help you avoid costly mistakes in the future.
No one begrudges paying for service, as long as there is value in it. At around £100 a month for the services of an umbrella company, you'll be getting a fully qualified back-office team who are paid simply to get you paid. And at about the cost of a drink each day an umbrella company is pretty good value.
On the whole, umbrella companies offer great benefits at an affordable price - just make sure you're with the right umbrella company whose price and service levels satisfy your needs.
Umbrella companies charge for their services in a number of different ways. Some umbrellas charge a sliding scale others are priced at a flat monthly fee. Others charge per invoice raised or when they process any of your business expenses.
Don't go for a pricing structure that is a percentage of your contract income. Some contractor umbrella companies still work this way and it can disadvantage the contractor. Choose an umbrella company that charges a fixed fee price.
When considering which umbrella company to register with, remember service levels and customer satisfaction are just as important as the price. You should try and check out the reputation of an umbrella company before joining, and not rely too heavily on what their own website says.
One way of doing this is to see what other contractors are saying about their umbrella company, ask around and chat to other contractors and get a feel for their experience. If you don't have someone you can lean of for advice, review the article below until you are comfortable about what makes an umbrella company the right choice for you. Phone around and see how they answer questions about their service. Remember, most reputable umbrella companies will provide you the same take home pay, if they are offering a ridiculously high take home, the chances are that they are cutting corners or not conforming to HMRC legislation. If a deal seems to good, it probably is. Read through our example umbrella company dialogue to give you an idea of the questions you should ask and the answers an umbrella company should provide.
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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.