As a contractor, you want to get the most out of your umbrella company. In some cases, that simply doesn’t happen. The best course of action? Switch to another umbrella company that offers what you need.
The truth is, there are several signs that it’s time to switch umbrella companies. In this post, we’ll outline some of the key signs that you need to shop around…
It’s now a legal requirement for every umbrella company to provide their employees with statutory benefits. As a result, ‘hidden’ costs have become more and more frequent.
You may now be receiving your sick pay, 28 days paid holiday and the option of maternity or paternity leave. But when you try to make a same-day payment, you’re being hit with an added fee. Or perhaps you’re looking for them to process expenses and they’re charging you extra.
These are not set behaviors, and could all be signs that your current umbrella company might not be the right fit for you.
It’s also worth noting that the fee the company charges you for their services will vary from company to company and might even change from agency to agency as agencies apply pressure to umbrellas to compensate them in return for letting a contractor work through them.
It might seem odd, but the majority of agency exclusive umbrella deals are backed by some sort of financial agreement between the umbrella and the agency. Whereas the umbrella might charge £25 a week to one contractor, it could increase its fees to £35 for an agency no other umbrella can work with (and often that hike goes directly to the agency itself).
Historically, umbrella companies would compete with each other by offering the lowest price. Now, they compete not only on cost but on access to agencies and benefits packages. That’s why it’s always best to see if you can get yourself a better deal elsewhere, while bearing in mind what benefits you will actually use.
It’s all very well getting a free gym membership with your umbrella, but if you’re not going to use it then you might be better off going with a cheaper umbrella.
Some umbrella companies have been known to mislead contractors when it comes to their fees. They do so by presenting something that looks like a good deal but is based on a higher tax rate to showcase inaccurate lower net fees.
Not everyone is aware of the difference between net and gross fees, but there are key differences. In short, a net fee is the amount taken off your pay after tax. This includes tax relief as, if it was paid to you, then it would be subject to tax and national insurance. A gross fee is the charge that’s done before tax, which is a much more accurate representation.
When umbrella present their fees as net fees, they will usually calculate them using the highest band of tax – with the highest rate of tax relief. In most cases, you’ll end up paying more.
As a contractor, you'll need Professional Indemnity, Public Liability and Employers’ Liability insurance. Most umbrella companies will offer these to you as standard.
However, if you’re not receiving it through your umbrella company – or paying extra for it – you might be best looking elsewhere. Not only is it a legal requirement for you employer to provide you with this cover but if they aren’t then you might find that your “umbrella company” is actually operating a gross pay model and you aren’t actually their employee at all.
You should also be aware of the minimum insurance cove you need to fulfil your contracts and the cover your umbrella actually provides. In most cases your umbrella will be able to increase your insurance cover if it doesn’t meet the minimum requirements of your contract however sometimes this will come at a cost.
Does your umbrella company offer you comprehensive support? Does it guide you when needed? Can you get in touch with them easily? This is another area where companies can vary.
Some umbrella companies will be reachable by phone on any given day, of any month at any time of the year. Others can be the complete opposite and only offer a support email to contact.
Some have even been known to have their own online portal. This is the best-case scenario and will allow you to have access to all your information and documents whenever you require them.
It’s an unfortunate truth that umbrella companies have very low margins, so you can’t blame umbrellas for wanting to keep their costs low. This often means that they sacrifice support in order to pass on lower fees to their clients (in a very price competitive market), but as many seasoned contractor will tell you, choosing bas service over a slightly higher fee is never the way to go.
You’ve been online and noticed that people are leaving unfavourable reviews about your umbrella company. Sometimes these can be one-off situations. But, if you start seeing more reviews that seem to correlate, it might be a sign that you need to switch before it’s you that’s leaving one of those unfavourable reviews.
Concerned now and want to check your company’s reviews? A quick google search of the name plus ‘reviews’ will tell you everything you need to know.
Or if you’re new to the company and want to dig a little deeper, head over to TrustPilot. Here, you’ll be able to find a whole host of helpful information that will give you an insight into the quality of their service.
There are many reasons that could make you want to switch. It could be anything from bad customer service, inaccurate or late payments to high fees. Fortunately, there are hundreds of alternative umbrella companies out there, so there’s bound to be a choice out there that's perfect for your needs.
However, it’s important to be aware of the potential pitfalls you may face when changing umbrella company. For instance, when you’re making the switch, it could take time for the status of your invoices and expenses to be reconciled. This is especially true when you attempt to change mid-contract.
Communication
To get around this, you’ll need to keep a good level of communication between both your old and new umbrella company. This will make sure that all information is transferred as quickly and as accurately as possible.
In-between roles
One of the best times to switch is when you’re in-between roles. At this point, you won't need to draw up multiple contracts for clients that come your way. You’ll also be able to avoid the delay that can happen administratively during the transfer.
Ultimately, when you’re looking for a good umbrella company, you need to evaluate how much value the company has to you. It could be in the insurance they offer, the extra benefits on top of statutory ones or something else. Either way, you’ll know what’s a priority for you and what exactly is the most valuable.
Are you someone who’s currently paying for a consultant, accountant or various insurances? Or, are you someone who is looking for quick and easy customer service? Or help with marriage allowance and childcare credits?
Either way, your umbrella company could provide you more than just financial benefits. Decide what type of service you need, and what added bonuses, and you'll be able to find a company that fits the bill.
Not sure where to start looking? With Umbrella Supermarket, you can compare the best umbrella companies online now in the time it takes to make a cup of tea.
Any contractor considering switching to an umbrella company will want to know how to find the best provider to work with.
Although you could spend your precious time and energy searching the web for the best umbrella company, there is an easier way – using an umbrella calculator.
In this guide, Umbrella Supermarket explains why every contractor should use an umbrella calculator in 2021.
If you are considering contracting you will need to decide on PAYE or umbrella.
It can be a difficult decision to make and contractors will inevitably be questioning which option will be the best for them.
To help every contractor get on the right track for them, in this guide Umbrella Supermarket looks at PAYE vs umbrella, outlining the key differences and how this will impact you.
There are many reasons that contractors across the UK opt to work under an umbrella company.
Umbrella companies offer an easy way to contract and remove the need for the contractors to worry about the burdens of admin, finances, tax and IR35, all things that limited company contractors have to deal with.
For this reason, many contractors will be weighing up their options and questioning whether it is worth using an umbrella company in 2021. To help make the decision that little bit easier, Umbrella Supermarket has put together this guide on the pros and cons of using an umbrella company.
Any contractor that is considering operating through an umbrella company in 2021 will need to understand Umbrella Company fees - from why an umbrella company charges fees, how they are paid to how much the contractor will pay.
In this guide, Umbrella Supermarket answers those all-important questions to help every contractor know exactly where they stand when it comes to umbrella company fees.
If you’ve made the decision to contract through an umbrella company in 2021, you will next need to find an umbrella company that’s right for you.
After all, there are lots of umbrella companies out there, so how do you know which one to choose?
To help you find the best umbrella company for you, in this guide Umbrella Supermarket outlines what makes a good umbrella company, so you can rest assured you’re making the right move.
One of the many advantages to operating through an umbrella company for contractors is that they become an employee of their chosen provider.
In turn, this means that the contractor will be automatically enrolled onto the umbrella company’s workplace pension scheme.
To help contractors find out more about umbrella company pensions Umbrella Supermarket has put together this handy guide.
If you are considering contracting through an umbrella company you will naturally have questions and queries over how they work.
After all, making the move to umbrella can be a big step for contractors. To help, in this guide Umbrella Supermarket explains how to get started with an umbrella company and share our top tips for using one in 2021.
PAYE or umbrella is a question asked by every contractor. Which one you opt for will have a big impact on your contracting career and lifestyle. So, it's important to make the right decision for you.
To help makes things a little bit easier, Umbrella Supermarket has put together this guide on PAYE or umbrella, outlining the key differences between each, to help you make the best and most informed decision for you.
One of the many benefits to working through an umbrella company is that you will receive holiday pay as well as a range of other statutory benefits including sick pay, maternity and paternity pay.
To find out more about umbrella company holiday pay, and how to calculate how much you will be entitled to, Umbrella Supermarket has put together this handy guide.
Contractors must make several decisions throughout their contracting careers. One big decision contractors have to make is how they will operate.
One way that contractors can work is through an umbrella company.
Umbrella companies have become an increasingly popular way to contract in the past few years, offering many benefits to the contractor. But, how do you know whether this option is right for you?
To help every contractor make the right decision for them, in this guide, Umbrella Supermarket explains when not to use an umbrella company.
There are tons of benefits to using an umbrella company, which is why they have become such a popular option for contractors in recent years.
After all, an umbrella company takes away the stress and hassle of operating through a limited company whilst offering contractors a range of advantages, such as statutory rights, paying them a salary, deducting correct tax levels and National Insurance, and taking care of tasks like expense processing and invoicing.
However, as more and more contractors opt to use the services of an umbrella company, more providers have started to claim that they are HMRC approved.
To bust the myths around HMRC approved umbrella companies and get straight to the facts, in today's guide Umbrella Supermarket look at whether HMRC approved umbrella companies really exist, so you know exactly where you stand.
If you're considering making the leap to contracting, you will understandably want to know how much you will have to pay in umbrella company costs. After all, this amount comes directly out of the contractor’s pocket, so it’s important to be clued up on how much you should expect to pay.
To help contractors, in this guide Umbrella Supermarket answer the all-important question of how umbrella companies cost in 2021.
