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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