An umbrella company is the ultimate solution for contractors today. They basically act as an employer for contractors enabling the contractor to be paid as a PAYE employee. The solution simplifies the invoicing, PAYE, and payment processes for contractors and offers many other benefits along the way. The contractor can receive an employment contract entitling them to professional insurances and much more.
Benefits of utilising an umbrella company
A contractor umbrella company can offer plenty of advantages to contractors and are the perfect solution for those looking for an effective service that can assist with PAYE and tax.
- An umbrella company helps contractors avoid the hassle of running a limited company. They enable contractors to focus on a contract without having to deal with the masses of paperwork involved for tax and PAYE.
- The experts can deal with everything from VAT returns to expenses, and company accounts. This means you don’t need to find and rely on an accountant in addition to other services. The contractor umbrella company will basically act as your employer, so you don’t need to worry about anything.
- If you are running a short-term contract for three months, then forming a limited company will prove to be really expensive. An umbrella company can reduce costs and give you a cost effective solution for the duration.
- One of the most appealing benefits of using an umbrella company is that there is minimum input required from you. If you are unsure about tax, contracting, and PAYE, then you can rely on a professional service to help you.
- You can gain employee benefits as an ‘employee’ of the umbrella company. This can consist of pension and life insurance, professional insurances, expenses, training, service guarantees, and more.
- Your NI contributions and tax payments are kept up-to-date for you and your payroll will be processed simply through PAYE. You can avoid paying a hefty tax bill at the end of the year as would be required by a limited company.
- Avoid the worry about legislation such as IR35; you are an employee with the contractor umbrella company.
- Avoid additional expenses such as professional insurances as these are provided by the umbrella company for you. You would be responsible for this is you decided to set up a limited company.
- As you are an employee, you can enjoy the benefit of being able to claim company related expenses from the umbrella company.
Utilising the services of an umbrella company can bring you these benefits and more. You can completely avoid the hassle, stress, and paperwork of running your own limited company and become an ‘employee’ with an umbrella company instead. Avoid dealing with PAYE, tax, and NI leaving the paperwork and confusion for someone else. And, gain additional benefits in professional insurances provided and the ability to claim business expenses back. You don’t need to even find an accountant with your VAT returns being dealt with as well. The benefits are extensive and the option to outsource makes it the smart solution for contractors. You can take advantage of the option available to you and reduce the stress of running your next contract.
Pearl is a business development blogger based in the UK. Pearl is a freelancer and uses services similar to that of a contractor umbrella company for work. Pearl highly recommends outsourcing to save time and hassle.