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Is an Umbrella Company the best option?

Setting up your own company can be time consuming and complicated. You'll have to be competent with spreadsheets, good at form filling (there's a load of that) and able to understand what the guy at HMRC is talking about - because if you don't all your money will be spent on fines.

Using the services of an umbrella company is like eating out at a restaurant instead of cooking yourself. No slaving over bubbling pots & pans, timing all the food to be ready at the same time then having to do the washing up.

In between which you're keeping your fellow diners supplied with drinks and condiments. No, you walk into the restaurant, order, eat and leave.

 

I want MORE paperwork!

Who on earth wants to spend all day at work then come home and sit in front of your PC slaving away at statutory administration? No, you probably want a life.

Being new to contracting you may be a bit dazzled by everything that's going on. But landing the contract is just the start. Now comes the paperwork.

If you haven't already been told you'll soon find out that however good you are at "widget development ++", engineering or teaching you won't be welcome on your client's site without setting yourself up as a limited company first.

Well, don't worry, you have an alternative choice which is painless, effective and very reasonable in cost. It's called an umbrella company.

 

To Do List

Registering with an umbrella company means you pass all your administration to someone else. Set up your own limited company and you'll have to:

Register your company at Companies House

Complete Annual Returns each year to update Companies House, this requires an annual fee.

Tell HMRC if the Company has any profits or taxable income in a Company year.

Complete an annual corporation tax return and pay the taxes within a set time.

Memorandum of Association

Articles of Association

Form 10 - Provides Directors' and Company Secretary's Names & Addresses.

Form 12 - States that the Company complies with the terms of the Companies Act

 

And that's just to set yourself up!

 

Relax - we'll take care of everything

Compare with the alternative, registering with an umbrella company takes just minutes, is cheaper and all the work is done for you.

Registering with an umbrella company can be done either on the phone or online.

Simplify Umbrella company MD, Emma Hainsworth, outlines the purpose of umbrella companies:

"Umbrella companies are designed to make the life of a contractor as simple and stress free as possible. We have a team all geared up to handle every aspect of a contractor's administration for them.

"When we're asked what is our 'secret to success', we just say "It's down to three things: customer service, customer service and customer service. It's about achieving high levels of customer satisfaction. We don't rest unless our contractors are happy, as simple as that."

 

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

1. Ten myths about IR35
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3. 60 second guide to an Umbrella Company
4. Over 70,000 of the latest contract jobs in the UK
5. Top contractor questions

 

written on2010-08-21 23:35:55

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