Do you feel like running your own business, however, discouraged because of all the paperwork you might encounter? Then joining an umbrella company might be the right choice for you. Basically, an umbrella company acts as an employer for contractors who will work on a fixed-term contract assignment. This gives contractors a simple, compliant and low-risk alternative to setting up their own benefits. If you are still not convinced by the umbrella company, we listed five advantages if you’ll join an umbrella company.
1. Simpler tax obligation
Joining an umbrella company gives you a more simple tax obligation. If you choose to be a limited company or sole trader, you will face more tricky obligation. There are a lot of forms to fill out and you will need to fill out a tax return at the end of the year. If you choose to join an umbrella company, you will be able to pay your taxes and national insurance on a monthly basis. You will be able to avoid seeing your bank account be drained all at once by the tax.
2. Less stress when it comes to chasing payments
If you join in an umbrella company, it will not be your job to chase payments from your clients. All you need to do is to submit your time sheets and expenses to the umbrella company you are working for and they will be responsible in reminding and chasing clients for billing. This can be an option for people who do not want to risk.
3. Good for intermittent workers
It will be a perfect place for workers who work intermittently. It does not matter how long or short your contracts and if you have times where you are not in work. Still, an umbrella can take care of your taxes and payments on your behalf.
4. Higher rates of pay
Contractors generally decide to become contractors for several reasons but this is one of the biggest reason for a shift of employment. By joining an umbrella company, you will be able to command a higher rate of pay than they could achieve working directly for a client. This is because you should have the skills and experience that clients want. Also, if you have the skills that are hard to come by, you will definitely enjoy being in an umbrella company as clients often look for a specific niche.
5. Umbrella companies can provide you with an employment contract
This is one of the best parts in joining an umbrella company. They can provide you with an overarching contract of employment. If you do not want to be tagged as self-employed, they can provide it for you. If you are self-employed, chances are, it will be hard for you to get any form of credit. As we all know, lenders are not fans of the self-employed and it is harder to get any credit approval since they see contractors as a high risk. Umbrella companies can employ you in the same way you would if you were working directly for a client. With this, you can also enjoy the benefit of having an employed status.
If you want to know more about umbrella companies, visit Eclat Accountancy Ltd and see how they can provide an umbrella company for you. Visit their website here.