If you’re a temporary worker, you might have to use an Umbrella company to cover some of your costs. But what should you look for when choosing an Umbrella company? Here are some tips to help you find the best one. Umbrella companies are becoming more popular as the government changes the rules regarding off-payroll working. And as a first-time user, you may be apprehensive about what to expect.
Make sure that the fee structure is clear and doesn’t have any hidden charges. Some umbrella companies try to hide their fees or try to keep your money. Pay attention to the amount you’re paying and whether it includes tax returns, P11D submissions, or any other fees. Then check the terms and conditions. It’s important to be clear about the fees before signing any contracts with an Umbrella company. If you’re unsure, make sure the company you’re working with has a 24-hour support line.
The best umbrella companies have dedicated support staff. They’re available by phone or email to answer your queries and provide you with a bespoke pay illustration. A payslip and full breakdown of payment calculation should be provided. If not, there might be hidden costs and extra deductions you didn’t know about. If you’re unsure, speak to other contractors. Chances are, they’ve had good and bad experiences with a specific Umbrella company.
Aside from being faster than a limited company, an Umbrella company offers a lower level of overhead for contractors. It also takes care of all the administrative work, such as invoicing and payment, as well as taxation and other paperwork. If you’re looking for a temporary contract, an Umbrella company is a good option, as you don’t have to worry about dissolving a limited company if you’re not satisfied with the service. It’s also a great way to try self-employment without the hassles and expense of a limited company.
If you’re unsure of the duration of your contract, you may be better off using a PAYE Umbrella company. However, many recruitment agencies have preferred supplier relationships with umbrella schemes. In such cases, you should do your research to ensure you’re getting the best deal possible. If you’re not sure, don’t use a recruiter with ‘kickbacks’ for recommending a certain Umbrella company.
Once you’ve decided to use an Umbrella company, you need to register with the company. You can do this by phone or online. During the registration process, you need to provide information about yourself, the type of assignment, and your bank account details. The company will then send you a contract of employment. Once you’re registered, you should fill out a New Worker Checklist. A payslip will be provided to you to show your take-home pay.
Umbrella companies will deduct their margin from the gross pay of your employees. This deduction comes before any other deductions, including the Apprenticeship Levy, so your take-home pay will be lower. A key debate with an Umbrella company is how the company’s margin impacts employment costs. As a general rule, it’s important to remember that you must pay employer’s national insurance when employing employees through an Umbrella company. Class 1 national insurance is 13.8% of your gross pay.