Viewing Do Umbrella Companies Benefit Contractors? from 2 How an Umbrella Company Works - What Contractors Should Know When First using an Umbrella Company Written by Contractor Supermarket guide to an umbrella company

---

Contractor Articles Feed - Get the latest Contractor Umbrella Company Articles

---

Do Umbrella Companies Benefit Contractors?

Freelance temporary contractors love the lifestyle and sense of freedom that comes with being self-employed. Choosing how to trade as a contractor is an important part of freelancing, and the choice between setting up your own limited company or using the services of an umbrella company has to be considered.

Whilst some contractors are happy to take responsibility for raising invoices, completing the correct HMRC tax forms and keeping detailed records of their business activity, many contractors prefer the less stressful option of using the services of an umbrella company.

Unlike permanent employees, contractors face various tax implications which can affect exactly how much they take home in their pay packet each month. Most contractors look for a way of reducing their tax bill, where possible, and rely on the professional advice of their umbrella company.

 

Key Benefits of Working Through an Umbrella Company

One of the other key benefits provided by an umbrella company is that they offer self-employed workers with a ready-made limited company through which they can operate multiple contracts. The umbrella company does all the administration & paperwork and only charges when the contractor is working, so in between contracts there are no worrisome bills.

The benefit from using an umbrella company is that the contractor saves time and worry on all the complex administration usually associated with running a limited company, including:

• Processing timesheets
• Understanding business expenses
• Raising invoices in the correct manner
• Credit control
• Calculating tax and National Insurance
• Collecting payments from the recruitment agency or end client

All legitimate umbrella companies provide additional benefits such as holiday and sick pay. Umbrella companies can also give the contractor access to other benefits not readily available to them, such as pension schemes, private healthcare, life and critical illness insurance and childcare vouchers.

 

 

Umbrella companies provide Employer's Liability and Public Liability insurance cover within the fixed price, and most also include Professional Indemnity Insurance, which helps to cover the contractor in the event of any legal cases being brought against them in respect to the services that they provide to their clients.

An umbrella company is designed for today's modern contractor who has better things to do after a hard day's work than sit in front of a computer and struggle with spreadsheets, forms and figures.

 

Visitors who read this article went on to read these articles:

1. 60 second guide to an umbrella company
2. Job Centre
3. Over 10,000 of the latest contract jobs in the UK
4. Help! I have to register with an umbrella company
5. What is an umbrella company?

 

written on2010-08-21 22:34:49

Add Comments and Feedback about Do Umbrella Companies Benefit Contractors? in our Forum