Working with an umbrella company allows you a ‘contractor’ to be an ‘employee’ of the umbrella company, which means you can concentrate on doing your work hassle-free while letting the company focus on the administrative side of things.

Like all options in life, working with an umbrella company comes with its benefits and drawbacks, hence you need to do your deliberation before choosing which path you wish to take. Though there are many reasons most contractors and freelancers prefer working through an umbrella company.

Benefits

Quick sign-up: Starting work with an umbrella company is as easy as counting 1, 2, and 3. Sign-up process is often quick with you needing to submit personal information as required by law and you can be done with the whole process in less than 20 minutes!

Ease of use: As a contractor you just need to submit your timesheets to your agency and be paid without any hassle.

Employee benefits

Being a part of an umbrella company means they become your employer, which makes you their employee. As an employee, you are eligible to Employee Benefits, including Statutory Sick Pay and Maternity/Paternity Pay.

Low costs: Working with an umbrella company, you’ll have all your taxes, NI and service fee (for their services) deducted before you receive your final payment. Meaning you do not need to go through the hassle of calculating your taxes and as the service fee is deducted from your gross pay – before taxes – it costs are less as well.

IR35 status

Your IR35 status becomes irrelevant when you work for an umbrella company and you are taxed like a permanent employee (PAYE), hence avoiding all the complicated IR35 rules, regulation and compliance issues.

Minimal Input

If you are somebody who likes to work on short and long term contracts, work with multiple clients or are an ‘in-between’ job type contracting, then an umbrella company allows you that flexibility with the most minimal amount of input.

With benefits being aplenty, one of our foremost advice to anyone looking to sign-up with an umbrella company is to ensure that the umbrella company is an Professional Passport accredited umbrella company. It will save you tons of headache in paperwork and money risk to be choose a compliant umbrella company.