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Why an Umbrella Company is Good News for Contractors

Contractors and freelancers benefit from using an umbrella company. An umbrella company will take care of all the hassles & administrative responsibilities associated with contracting. An umbrella company is a great option for today's modern contractor who is looking for a stress free career.

Umbrella companies provide contract workers with limited company status, which enables the contractor to work on multiple contracts if necessary, whilst leaving the umbrella company to do all their administration. This saves the contractor a great deal of time which would otherwise be spent on all the paperwork usually associated with running a limited company.

 

Working for You

Here are just some of the tasks which you can off-load to an umbrella company, and all for a very modest monthly fee:

Processing timesheets

Understanding & processing legitimate business expenses

Raising invoices in the correct & punctual manner

Correctly calculating and paying the tax and National Insurance Contributions

Collecting payments from third parties (either your recruitment agency or client)

Dealing with legal contracts

Keeping & filing records in accordance with current legislation

 

Umbrella companies also offer many additional benefits such as:

Holiday pay

Sick pay

Maternity pay

Pension schemes

Private healthcare

Inclusive insurances

Childcare vouchers

Emma Hainsworth, MD, Simplify Umbrella, clarifies:

"Umbrella companies offer a very stream-lined, hassle free way for contractors to trade through. For example, any contractor who uses the services of an umbrella company has no worries concerning IR35, MSC, income shifting or any of the other legislation HMRC uses to penalize self-employed contractors.

"The umbrella company fulfils all the legal obligations for the contractor.

"For contractors wantng a hassle free contracting career, umbrella companies are the perfect option. They allow contractors to minimise the fuss and maximise their take home pay."

A decent umbrella company operating within strict HMRC guidelines provides all the tax benefits of having your own limited company without the contractor having to understand any complex tax laws or dealing with potentially complicated issues such as IR35 or Section 660 (the ‘husband and wife tax').

 

Inclusive Benefits

Umbrella companies will include Employer's Liability and Public Liability insurances, which covers the contractor in the event of any legal action being brought against them whilst fulfilling their contract.

By using an umbrella company when contracting, the contractor becomes an employee of the umbrella company, while retaining independent flexibility to find and choose their own

Work
Clients
Rates
Terms and conditions

Running their own limited company may suit some contractors, but the majority of contractors will see the obvious benefits that come from using the services of an umbrella company. Each contractor has their own set of individual circumstances and needs to make their own judgment.

Umbrella companies help contractors save time on administration, time which would be better spent finding new business or working on existing contracts.

Umbrella companies are an easier way for contractors to get paid and more often than not to reduce their tax bill - whilst at the same time reducing their paperwork to a minimum.

 

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

1. Over 70,000 contract roles throughout the UK
2. Calling an umbrella company for the first time
3. Your responsibilities when using an umbrella company
4. Quick guide to an umbrella company
5. Benefits of working through an umbrella company

 

 

written on2010-08-21 23:53:58

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