Insurance
As the umbrella company employs the contractor, they must have employers’ liability insurance. This is a legal requirement for all employers in the UK and protects workers should they become ill or injured at work. Therefore, it’s important to check that the umbrella company will provide you with this when comparing which company to choose.
What’s more, contractors may expect an umbrella company to cover them with professional indemnity and public liability insurance. Although these aren’t legal requirements, they are usually in the client contracts meaning you will have to cover the costs yourself if they are not provided by the umbrella company.
Payment terms
Another thing to look at when comparing umbrella companies is what payment terms they offer.
It’s important to ensure that the umbrella company you choose will make the payment process as quick, easy and stress-free as possible.
You will need to look at how often the umbrella company makes payment runs. A good umbrella company will usually make payment runs several times a week, meaning they should be able to pay you quickly after you have submitted your timesheet.
It’s also important to check that you will get paid on time. Avoid any company that makes it difficult to get paid, such as those that require paper timesheets, or those that require timesheets to go through an approval process before they are paid.
Finally, every contractor should look at for any catches or bottlenecks that can cause payment delays. For example, no umbrella company should say that they will only pay the contractor once they have been paid as this is not appropriate in the context of the employer-employee relationship.
Contractors should also look at how often they will get paid, whether that’s same day, weekly, fortnightly, monthly or another frequency, to find the best option for them.
Expenses
Contractors should always look at what the umbrella company’s expenses policy is.
Umbrella contractors can usually claim expenses back on mileage, accommodation and things like training costs if they are incurred whilst doing the job.
Contractors should ensure that the umbrella company they choose complies with HMRC rules around umbrella expenses and steer clear of companies that claim to help the contractor save on tax by claiming a wide range of expenses as this is not the case.