5 Benefits to Working with an Umbrella Company

Why Work with an Umbrella Company in 2021

To see whether umbrella is the best option for you, in this guide Umbrella Supermarket outlines the 5 main benefits to working with an umbrella company in 2021.

Take the worry out of IR35

In recent months, many contractors have made the move to umbrella in order to avoid getting caught out by upcoming reforms to IR35.

IR35 was first introduced in 2000 to prevents workers like contractors from operating as ‘disguised employees.’ It was implemented to stop workers from claiming to be self-employed in order to avoid paying tax and National Insurance, but who operated more like an employee.

When it was first introduced it was the contractors’ responsibility to determine their own IR35 status. However, this changed in 2017 when HMRC deemed that too many companies were not compliant. From here, in the public sector it become the responsibility to the client to determine the contractors’ IR35 status.

This led to thousands of contractors being wrongly classified as inside of IR35 and paying too much in tax as a result.

From April 2021, this will also apply in the private sector where it will become the responsibility of the client, not the contractor, to determine the contractor’s IR35 status. Understandably, thousands of self-employed contractors are concerned about IR35 reforms and how they will impact them.

After all, many of these contractors will end up paying more in tax as if they were an employee, but will not receive the benefits an employee is entitled to such holiday pay, sick pay and maternity or paternity leave.

This leads us on to one big benefit of working through an umbrella company, it means total exemption from IR35.

As the umbrella company makes the contractor their employee, the contractor is automatically considered outside IR35 and therefore doesn’t have to worry about getting caught up in it.

Enjoy a range of employee benefits

This takes us on to another benefit of working through an umbrella company, it entitles contractors to a range of employee benefits.

As we have mentioned, as the umbrella company employs the contractor, they therefore qualify for statutory rights.

This includes sick pay, paid holiday leave, a workplace pension and maternity and paternity leave.

This means that should the contractor wish to take a break, or unexpectedly falls ill, they can rest assured that they will receive paid leave. This is a big advantage of working through an umbrella company, contrary to a self-employed contractor who has to pay out of their own pocket should they wish to take any time off.

To find out more about umbrella sick pay and other statutory rights check out our handy guide.

Enjoy the freedom of contracting with the security of employment

Umbrella companies are well known for offering contractors the freedom and flexibility of contracting with the security of employment which is another reason that thousands choose this as a route.

Unlike with a PAYE agency which chooses what contracts the contractor has to work on, umbrella contractors are free to choose which contracts they work on and when, meaning more freedom over their careers.

This is a great option for contractors who want to choose which clients they work with and when, however don’t want to deal with running a business in the case of limited company contractors. After all, these contractors must set up and manage their own business, taking on admin tasks, paperwork and filing for self-assessment.

To find out more about umbrella vs limited company check out our handy guide.

Make tax easy through PAYE

Unlike self-employed contractors who have to file for self-assessment which can often be a complex task, umbrella contractors pay tax through PAYE.

This is because the contractor is an employee of the umbrella company. Because of this, the umbrella company pays the contractor a salary, processes their tax through the PAYE system and deducts what is owed from their income before it is paid to them. This means no tricky tax calculations or having to set aside part of your earnings for the end of year tax bill.

This makes contractors lives a lot easier and is another reason thousands of contractors choose this route.

Enjoy a hassle-free way of contracting

The final benefit of working through an umbrella company is that it takes the hassle out of contracting.

After all, a self-employed contractor must source and secure their contracts, work on the contract whilst running their own business and filing for self-assessment.

On the other hand, an umbrella company takes care of admin tasks, invoicing the client and will even pay the contractor a salary meaning no complex tax calculations.

All an umbrella company contractor must do is submit their timesheet and focus on the contract at hand. Many contractors see this as a huge benefit as it allows them to strike a better work-life balance.

If you have looked at the benefits of working with an umbrella company and have decided this is the right path forward for you in 2021, the next step is to use Umbrella Supermarket’s umbrella company calculator to find the best umbrella company for you.

Ready to find the best umbrella company in 2021?

As contracting through an umbrella company has become an increasingly popular option, more and more umbrella companies have opened up to cater for demand. This can make it difficult to know which the best company to work with is.

That’s where our umbrella calculator comes in handy. Simply enter your details and in just 2 minutes we will generate a list of the best suited umbrella companies for your contracting needs so you can find the best umbrella company this new year.

Why not see what our umbrella company calculator can do for you today?

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Using an Umbrella Calculator

The Pros of Using an Umbrella Calculator

There are many advantages to using an umbrella calculator for contractors.

Umbrella calculators allow you to quickly compare thousands of umbrella companies across the UK, offering a clear overview of what you will receive from the company, including everything from your take-home pay, what benefits you will receive, and what services the company will offer.

To help contractors find out more, Umbrella Supermarket outlines the main benefits to using an umbrella calculator in 2021.

umbrella vs limited

Umbrella vs Limited Company: What to know when making the move this new tax year

The 6th April 2021 marked significant changes to IR35 legislation which impacted thousands of self-employed, limited company contractors operating within the private sector.

In light of the changes that have now rolled out, many limited company contractors are understandably considering their options and thinking about making the move to umbrella this new tax year.

To help make the decision that little bit easier, in this guide Umbrella Supermarket outline what contractors need to know about making the move from limited company to umbrella in 2021, to help you get on the right track.

 

umbrella company vs paye

Umbrella Company vs PAYE: What should you choose?

Umbrella company vs PAYE is a question asked by thousands of contractors.

After all, it’s a big decision to make that will have a direct impact on your contracting career and day-to-day life, so it’s not one that should be taken lightly.

To help every contractor make the right decision for them, Umbrella Supermarket has put together this insightful guide outlining the key differences between umbrella and PAYE and the advantages and drawbacks of each.

avoid ir35

How can I avoid IR35?

As a contractor, you will most likely know about IR35 and upcoming reforms from April 2021.

These changes to IR35 legislation are set to badly impact many self-employed contractors in the private sector, so thousands are understandably worried. After all, getting caught out by IR35 can mean you end up paying more in tax than you need at the same level as an employee, without receiving the benefits of being employed, such as statutory rights.

umbrella company costs

Umbrella Company Fees: How Much Should You Pay?

When deciding which umbrella company to work with, the fees they charge will inevitably play an important role in the decision-making process.

Umbrella company fees are taken directly out of the contractor’s income, so it is only natural that contractors want to ensure they are getting a fair deal.

To help contractors understand umbrella company fees, from how they are charged, what they will receive in return, and how much they should be paying, Umbrella Supermarket outlines everything there is to know about umbrella fees in this handy guide.

umbrella vs limited

Pros and Cons of Limited vs. Umbrella

Big reforms to IR35 legislation are set to come into motion from 6th April 2021 which will impact the thousands of self-employed, private-sector contractors out there.

For this reason, many of the contractors that currently operate through a limited company will be considering the umbrella company route as an alternative.

If this is true for you, it’s important to do your research to find out whether limited company vs umbrella is the best option for you in 2021.

To help make the decision that little bit easier, in this guide Umbrella Supermarket outline the key differences between limited vs umbrella, so you can get on the right track.

2021 budget

What Does the 2021 Budget Mean for Contractors?

On 3rd March 2021 Chancellor Rishi Sunak unveiled his Budget in the House of Commons, outlining the government’s tax and spending plans for the year ahead.

Sunak announced a variety of measures he will put into place to help businesses and jobs that have suffered through the pandemic, as well as outlining a plan for the long-term recovery of the economy.

However, the question many contractors will be asking is how the Budget will impact the

ir35 reforms

Contractor’s Guide to IR35 in 2021

From April 6th 2021, reforms to IR35 legislation will come into force, impacting the lives of thousands of self-employed contractors.

Inevitably, contractors across the UK are concerned about upcoming reforms and how these will affect them. To help, in this guide, Umbrella Supermarket look at what these changes to IR35 entail and how they might impact you as a contractor in 2021.

 

compare umbrella company fees

How to Compare Umbrella Company Fees

If you are considering joining an umbrella company in 2021, or have been contracting through one for a while and want to ensure you are getting a good deal, it is important that you know how to compare umbrella company fees.

What you pay in income tax and National Insurance will be the same regardless of which umbrella company you choose, however the fees the umbrella company charges can make a big difference to your take home pay.

At Umbrella Supermarket, we know that every contractor wants to get a fair deal. To help, we explain how umbrella company fees work and how you can compare them to find the best deal.

job retention scheme

Job Retention Scheme for Contractors in 2021

The COVID-19 pandemic has impacted workers across the UK and contractors have been no exception.

Many of the 1.77 million independent contractors have either lost work altogether or have had contracts put temporarily on hold leaving them in a tricky position.

Fortunately, many of these contractors are eligible for the government’s Job Retention Scheme otherwise known as furlough, introduced to offer financial support for businesses and workers. This has been an essential source of income for many who have lost contract work as a result of the pandemic.

As we experience a third national lockdown, the furlough scheme has now been extended until the 30th April. So, if you find yourself out of contract work or have projects on hold, Umbrella Supermarket are here to explain what the Job Retention Scheme is, how it works and what this means for contractors.