With the wealth of services that umbrella companies can offer by way of supporting and handling everyday business affairs, it’s easier than ever to be a contractor in the current job market
Not only will a good umbrella company offer peace of mind, absolute compliance and complete security, they are also play a vital role in giving out practical advice relating to legal guidance, educational changes, technical support and payroll services.
Umbrella companies essentially aim to make life easier for contractors and freelancers by offering them employee status, allowing them to enjoy the support and security of a contract of employment, while having the flexibility to pick and choose their assignments. This independence means that contractors can set their own hours and work/life balance, an appealing option for anyone in business.
The umbrella company will then present a contractor’s skillset to a wide range of companies and clients, giving them exposure to projects they may otherwise have missed, a perfect solution for those who wish to set up their own company but simply don’t quite know how to carve out their own niche.
Contractors may also submit timesheets and expenses to the umbrella company, which will invoice and chase any outstanding monies owed. It’s the responsibility of the umbrella company to deduct the correct amount of PAYE tax and National Insurance before sending the money on, avoiding the hassle of filling in potentially tricky tax returns and nearly eliminating paperwork altogether. It’s also the role of the umbrella company to keep abreast of the latest industry news and of any legislation and regulation changes and relay this promptly to the contractor. The scope for umbrella companies to prove their expertise here is as broad as it is long, providing them with the perfect platform to lead the way when it comes to tackling subjects such as employment law, health and safety and HR.
This is often an extremely attractive proposition for contractors, as it means they can dedicate more time to honing their own skills and experience and cultivating their own successful career, rather than getting bogged down by bureaucratic red tape.
The introduction of IR35 legislation in 2000 is one of the main reasons why umbrella companies have risen in popularity, with contractors favouring their support and protection when it comes to investigating back taxes and filing difficult paperwork relating to PAYE and National Insurance Contributions.
As more legislation and increasingly complex laws have been introduced, umbrella companies have gone from strength to strength, proving they can help contractors in their day-to-days lives, all the time improving and refining their service offering to the sophisticated levels that we see today.
