Umbrella companies vary in their fees, terms and other perks. Find out what to consider when comparing umbrella companies to find the best for you.
For freelancers looking to simplify the process of tax submission and obtain the same benefits as those working in full-time employment, searching out an umbrella company could pose the most attractive way forward. While there is a plethora of options to choose from, each claim to be the best umbrella company in the UK, making it hard to know where to turn.
Unlike other guides on the subject, Umbrella Supermarket have no agenda and won’t try to push you towards using one company over another. Instead, our objective is to first of all ensure that an umbrella company is indeed the right option for your circumstances, then make the process of choosing a suitable one as easy, efficient and hassle-free as possible.
Self-employed people in the UK who prefer to work for themselves have three main options when it comes to complying with British tax and employment laws. These are:
This option is working for yourself in the truest sense of the phrase and means your earnings will only be subject to PAYE income tax and national insurance. However, it does not offer any statutory benefits (such as maternity or paternity leave, sick pay or holiday pay) and also entails a substantial amount of administration on your behalf. Tax returns must be submitted annually, quarterly or even monthly depending on your circumstances.
Setting up shop as a limited company allows you to separate yourself from your business completely, meaning there is reduced liability attached to your own personal assets if things should go wrong. Moreover, switching from a sole trader to the director of a limited company allows you to pay yourself a salary and additional dividends annually, which incur a lower tax rate and could help you to save money. It does involve increased admin, however.
By choosing to work through an umbrella company, you’ll become an employee of that firm and will receive the full statutory benefits outlined above, as well as having all of your invoicing and tax returns taken care. However, you will be required to pay the umbrella company a weekly or monthly fee in exchange for the benefits they provide in comparison to limited companies and sole traders.
Bearing in mind those three options, it’s well worth taking the time to investigate which particular one will be most beneficial to you and your business. If you decide that the practicality and peace of mind offered by an umbrella company is well worth the extra expense, it’s now time to locate the best umbrella company for your needs.
Your first port of call when searching out the best umbrella company to take care of your business should be an umbrella comparison site, which can allow you to see at a glance the various terms, services and perks provided by each one. In fact, 76% of people have saved money by using an umbrella comparison site prior to picking one to help them. Some of the things you might want to keep an eye out for include:
It’s important to find out when and how often the umbrella company plans to pay you, whether that be monthly or weekly. Steer clear of any organisation only offering pay-when-paid terms. As an employee, you deserve to receive regular remuneration.
Find out the terms of their pension schemes and whether it’s possible to opt in or out, as best befits your personal preferences and circumstances. Some may offer more favourable terms than others.
Certain contracting jobs require specific kinds of insurance, such as Employer's Liability, Professional Indemnity and Public Liability. It’s important to check whether you are required to obtain these by law and whether your chosen umbrella company provides them.
Many people like to be able to log in to their business account and monitor incoming payments and outgoing expenses remotely, so that they can keep tabs on their finances at all times. If this is important to you, check it’s provided by the company in question.
While the ease and automation of digital services can be hugely convenient, there are certainly times when you still want to get hold of a human being to answer your questions. Check whether your chosen company offer 24/7 phone support or simply an email address.
After having narrowed down the list of possible contenders, it’s time to find out more about the potential winner before you sign on the dotted line. Here are a few tips on how to ensure you don’t get stung by a cowboy operation or a partner that isn’t right for your needs:
With a large amount of umbrella companies springing up in recent years, it’s a good idea to ensure you use an established and reputable firm. A thorough background check will include how long they’ve been trading and what their credit rating looks like. If the umbrella company should go bankrupt or out of business, your money will disappear with it.
Not all umbrella companies are immediately up-front and transparent about their fee structure. As well as learning if it’s fixed-rate or fluctuating, you should investigate whether services such as processing expenses and submitting tax returns are considered as part of the package or additional extras.
Some umbrella companies may stipulate that there are fees for signing up and penalties for leaving their payroll. Since you will effectively be becoming their employee, this is counter-intuitive and should be avoided. However, it is important you adhere to the terms and conditions of your employment for the duration of your contract, or you may risk losing out.
No one can tell you more accurately how an umbrella company is run than those who have already experienced its services first-hand. Read online reviews from genuine customers and form a picture of how reliable they are as a business partner.
Finally, your own experiences and intuition can be the best guide when it comes to finding the best umbrella company for your business. Call them up and grill them on their credentials. The speediness and quality of their response will tell you all you need to know about their customer service protocols.
At Umbrella Supermarket, all the umbrella companies on our site are fully compliant and reputable, so you know you’re comparing the very best. Enter a few details on our comparison tool to compare quotes from the best umbrella companies today.
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.
