Using an umbrella company essentially means that you as the “contractor” become and employee of the umbrella company. Contractors prefer using umbrella companies for a variety of reasons. First, PAYE schemes offer the easiest way to contract which frees you of the administrative obligations the limited company has. The umbrella scheme can also be the solution if you are caught by the IR35 rules. We are presenting 5 more advantages for contractors of having the umbrella company.
1. Having an umbrella company is easy to use. Companies who are using umbrella companies can simply submit their timesheets and expense claims to the umbrella company and wait to be paid. It is not their job to process for this but for the umbrella company. They also take care of all the invoicing, administration, chasing payment and processing the payroll, which makes your life easier.
2. Umbrella companies are suitable for contractors who have both long and short-term contracts who want minimal input. It is also a good solution if you are working on an hourly rate.
3. All tax and NI is calculated and already deducted by the umbrella company prior to you receiving money. This simply means you do not need to compute your taxes because they already did. You don’t need to concern yourself with all the admin or paperwork because they already finished the job for you.
4. Umbrella companies offer the perfect solution for those who are unsure about contracting. They can also be of help when it comes to other types of contracting like in between jobs as there is minimum input required.
5. Lastly, this is for people who are unsure whether contracting is a perfect platform for them. Working via the umbrella company offers a low-risk way of trying things out. After that, you can easily form a limited company at a later date if you choose.
These are some of the advantages of having an umbrella. You have to keep in mind that there are still other advantages you need to know for you to be able if it is the right platform for you. Eclat Accountancy Ltd offers services for umbrella companies. Visit their website to know more about this offer.