If you are a contractor, working through an umbrella company could be the best solution for you. As of the 6th April 2017 legislative changes regarding off-payroll contracts (IR35) many contractors working in the public sector are changing to umbrella companies. Umbrella Company could help you receive the full benefits of working through an umbrella company. The following blog aims to inform you about these benefits as well as a providing a brief summary on the sign up process.
- Continuity of employment
If you have multiple assignments an umbrella company could be the best option for you. An umbrella company allows you to have one tax code regardless of having multiple assignments ongoing. This reduces the hassle of having different tax codes for varying assignments with multiple agencies being involved.
- Easy life
If you decide to work through an umbrella company, you will be working for that company, as a result you will only have to submit a signed weekly time sheet to the umbrella company’s online website. The company (agent) will be in charge of all tax and NI contributions taking the onus of you. Once the online registration form has been completed, the estimated weekly administration is only 10-15 minutes.
- Employee Benefits
As an ‘employee’ of the umbrella company you will be entitled to all the benefits of being under permanent employment such as:
Highly regarded umbrella companies will provide insurances for you whilst you are working, at no cost. Insurances such as: Employers’ Liability Insurance, Professional indemnity Insurance and Public Liability Insurance.
Which contractors are best suited for Umbrella companies?
Umbrella companies are an easy solution for all freelancers. However, an Umbrella company may be the optimum solution for you if you are:
- Earning less than £15 per hour
- Looking for an introduction into self-employment, before starting your own limited company
- Working on short term assignments (3 months or less)
- Working in the public sector
- Unable to be a director of your own limited company
The sign up process is easy and stress-free. A registration form has to be completed asking for your personal details and information relevant to your assignment. Often proof of your address and identity is required. Once the umbrella company is satisfied with the details you will then be asked to sign a contract completing the process.
Your chosen Umbrella provider should operates in full compliance with HMRC legislation, and is audited regularly by industry professionals. There are many companies operating that claim to be able to provide you with 90% of your pay – these schemes are not approved by HMRC and should not be used.
For further reading go to http://www.accountingweb.co.uk/community/blogs/dilabrien/should-you-incorporate-offshore-as-a-contractor