What are the main benefits of using an Umbrella company?
With IR35 ‘Off Payroll’ rule to be extended in 2020 and affecting those working in the Private Sector, one way to ensure that you are compliant with the IR35 rule is to give yourself an employed status. The most straightforward way of doing this is to use an Umbrella company, where you will be provided with a payslip and paid via PAYE.
Umbrella Companies can offer contractors a more practical option as well as a number of benefits.
The most obvious benefit is that it saves a contractor from having to manage their own tax affairs and National Insurance contributions each month. All of your finances are managed on your behalf and taxes will automatically be deducted for you.
Other benefits include:
- No Hassle
Umbrella route frees you from the overhead of setting up, and later shutting down, a limited company, as well as having to take on the role of a company director. This makes your business as easy to manage as possible with no daily admin etc. You simply submit your timesheet and your umbrella company takes care of the rest for you.
Working as an umbrella employee means that IR35 will not be relevant to you, which can be a great relief to contractors, making an umbrella route a more attractive and viable option.
- No Tie Ins
The decision to operate using an umbrella company is not binding, so at any point you could opt to switch to a limited company structure if needed or required.
- Employee Benefits
You will effectively be viewed as an employee when working with an umbrella company. This means that you will get all the benefits of being an employee including sick pay, holiday pay, travel expenses etc but with the freedom of being a contractor, giving you the best of both worlds.
Umbrella companies are ideal if you are looking to test the waters and want to know whether contracting will work for you. There is very little paperwork, meaning less stress and hassle. Same day payments mean you are paid faster and the option to work either short or long-term contracts depending on your circumstances.
If you would like to discuss how you could benefit from using an Umbrella company, please contact us on 020 3817 8170, or click HERE to find out more and to request your personalised illustration.
Our experienced account managers will guide you through everything you need to know and answer any questions you may have.