Beginner’s Guide to Using an Umbrella Company

Getting started with an Umbrella Company

Getting started with an Umbrella Company

The great news is that getting set up with an umbrella company is quick and easy. That’s why it’s such a popular option for thousands of contractors across the country.

Unlike with the limited company option, through which contractors have to register the business with Companies House, you can sign up and start working with an umbrella company straight away.

To find out more about contractor’s options and how they can operate, check out our handy guide.

How to get paid by an umbrella company

Once you’ve signed up to an umbrella company the next thing contractors will want to know is how they will get paid.

The umbrella company employs the contractor which means they put the contractor onto their payroll.

This means that once the umbrella company has collected the fee from the client on the contractor’s behalf, they will then process it through the PAYE tax system. This ensures that the contractor is paying the correct levels of tax and National Insurance in line with current tax bands.

This means that umbrella company contractors don’t have to worry about invoicing the client and chasing up payments as a limited company contractor would, as the umbrella company takes care of this for them.

What's more, it also means that umbrella contractors don't have the stress of filing for self-assessment which can be complex and time-intensive.

With an umbrella company the contractor's tax obligations are fulfilled and taken care of, meaning no stress or hassle required.

How to claim expenses

Although umbrella contractors are employees of their chosen umbrella company, they are still able to claim expenses. This is great news for contractors as it means that they will receive tax relief on these expenses.

It is worth noting that HMRC has strict rules on what can be claimed as an expense and expenses will need to be business-related. In other words, these should be unavoidable costs that you incur in order to carry out the contract.

The umbrella company you work with will guide you through what you can claim and how to do this. You will then simply inform the umbrella company of your expenses and they will take care of the rest.

How to receive the right services from the umbrella company

Another thing you will need to consider when getting set up with an umbrella company is the level of services and benefits you will receive from the umbrella company.

After all, every contractor is different and has a different set of requirements. Some will want help with childcare credits, others will want access to same-day payments. Some contractors only require the basic level of insurance, others will need additional cover.

Whatever is important to you, you'll need to ensure you are receiving these services from your chosen company to ensure you get the best contracting experience possible.

Now you know how easy it is to get started with an umbrella company, it’s time to choose an umbrella company that’s perfect for you.

How to choose the best umbrella company

There are lots of umbrella companies out there to choose from which means contractors need to take the time to find the perfect provider for their contracting needs.

Thankfully, with Umbrella Supermarket’s umbrella company calculator this couldn’t be easier.

Rather than spending hours searching the web, our contractor comparison tool makes finding an umbrella company quick, easy and hassle-free.

Simply head over to our umbrella company calculator, enter your name, contractor rate, preferences and information and our calculator will generate a list of the best-suited umbrella companies for you.

Once you've got your list of results, you can compare umbrella companies to ensure you get the best fit.

When comparing umbrella companies the first thing to look at is umbrella company fees. After all, every umbrella company charges the contractor fee in return for the services they offer them.

However, umbrella fees vary between companies, so it’s always important to look at how much you will be charged under each.

Usually, you can expect to pay around the £20-30 mark per week, however this will vary depending on the amount and level of services you require.

The next thing to compare is the company’s reputation. After all, although most of the umbrella companies out there are trustworthy and reputable, like in any sector there are a handful that aren’t.

To help give you peace of mind Umbrella Supermarket will only ever work with umbrella companies we know and trust, so you will only ever be choosing the best out there.

Finally, contractors should compare how much they will take home at the end of each month under each umbrella company.

Again, Umbrella Supermarket make this easy to do, showing contractors what their payslip will look like under each umbrella company. That means you can ensure you are getting the best deal out there for you.

For more help with what to look out for when comparing umbrella companies check out our useful guide.

If you’re ready to find the best umbrella company for you Umbrella Supermarket are here to help

If you've decided that using an umbrella company is the best path forward for you in 2021, Umbrella Supermarket is here to help.

Our handy umbrella company calculator helps you find an umbrella company that’s just right for you. What’s more, it takes just a matter of minutes to find your perfect provider.

We take the hassle out of finding an umbrella company. Why not give it a go yourself today?

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Decision Making

Is PAYE Better Than Umbrella?

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.

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Why Should Contractors use an Umbrella Company?

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.


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Does an Umbrella Company Charge Fees?

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.


What makes a good umbrella company

What Makes a Good Umbrella Company?

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.

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Guide to Umbrella Company Pensions

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.


PAYE and Umbrella

Guide to PAYE vs. Umbrella

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.

Holiday Pay for Umbrella Contractors

Complete Guide to Holiday Pay for Umbrella Contractors

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.

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When Shouldn’t You Use an Umbrella Company?

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.


The truth about HMRC approved Umbrella Companies

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.

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How Much are Umbrella Company Costs?

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.


Choose Between PAYE or Umbrella

How to Choose Between PAYE or Umbrella

Every contractor faces the decision between PAYE or umbrella, but how do you know which is the best option for you?

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Thankfully, Umbrella Supermarket is here to help. In this guide, we take a look at PAYE vs. umbrella, explaining what you should know before making the all-important decision.