subject: The Benefits Of Using An Umbrella Company [print this page] The Benefits Of Using An Umbrella Company
A lot of jobs don't offer continuous employment or, if they do, this isn't always what you want. If you're after an option that offers flexibility in when and how much you work, consider an umbrella company. These are great for people working in contracted roles. You are essentially an employee, meaning you get the benefits of working for a large company like sick pay as well as getting a higher rate of pay as a permanent employee, meaning you get the flexibility of contracting and stability of being employed.
Umbrella companies are very easy to use the company will charge you a flat fee for dealing with all your paperwork, taxes and other administration so you don't have to worry about it. You simply submit your time sheets to the agency who then invoice the client for the work you have done and you are paid as an employee. This means you don't have to worry about calculating your tax as the money you are paid is all yours.
There are other fantastic financial benefits offered by working with an umbrella company. You can claim back any expenses you incur as part of your work the most common expenses are travel, subsistence (such as lunch) and phone calls. This means that, essentially, you pay less tax and increase your take home salary as the expenses are offset against the tax you pay. Contractors also benefit from the higher rate of pay that comes with having the agency negotiate your deals.
If you're worried about not being able to manage your time, then umbrella companies could be a good option for you. You have the flexibility to choose between short and long term contracts, so you can pick your hours to suit you. The agency will also fill in all your paperwork for tax payments so you don't have to worry about it. They'll also be fully insured as an employer. You'll be covered on this as an employee, so don't worry about taking out liability or other insurance.
If you're still not convinced, try comparing the benefits of working for an umbrella company with setting up your own limited company. With a limited company, it would be up to you to take care of the administrative burden no matter how little you work and you probably won't have any benefits. By comparison, working for an umbrella company means you can work what you want, when you want without all the administration and you can control your outgoings by not having to pay the agency when you're not working.
