Contractors who are planning to join an umbrella company should ask these questions before doing so.
1. What is the joining fee?
Umbrella companies have varying fees. These different fees vary greatly. Contractors who pay a low fee might only be obtaining a basic service. Contractors could either choose a basic service or obtain extras such as indemnity insurance. Those who contemplate joining should check the extras they can get with the different options.
2. Does the company impose a penalty fee if a contractor quits?
Contractors must check if there are penalty fees when they have to leave the umbrella company. There are companies that insert penalty clauses. Contractors should shun away from companies that have one.
3. How regular are payments made?
There are three methods of payment. These are monthly, weekly, and on the production of timesheets.
4. When do contractors get their pay?
There are umbrella companies that pay contractors as soon as they obtain the timesheet or the next day. There are those that pay contractors when they obtain payment from the client.
5. Do these companies include Indemnity Insurance?
There are different kinds of Indemnity Insurance. Contractors should ask these umbrella companies if they have Indemnity insurance included in the package. There are companies that do not include it in the package, yet they try to sell it to the contractor after signing up.
6. How big is the company?
Contractors should check the number of contractors and turnover of a company. It is better to have a company with lots of contractors over other companies that have fewer ones.
7. How long has the company been in operation?
Companies that have been in operation for a long time are generally safer. There are umbrella companies that exist as far as the IR35 legislation was enacted. There are those that are new companies.
8. Check the background about the owners.
There are companies that have owners who have Accountancy backgrounds. There are others that have an IT background. There are also others that are in neither of the two. Contractors must join an umbrella company that they feel safest with.
9. What expenses can contractors claim?
Contractors can check the standard expenses that they can claim against tax. If the company promises more than the standard, then these companies are on the borderline of danger.
If you are a contractor who wants assistance regarding the umbrella company, then you can ask for assistance from our company.