Which umbrella company is the ideal for me? As a contractor you need to select an umbrella company wisely. Choosing an unreliable, non-compliant umbrella company could have a negative impact on your contracting career. Having your specific needs met in an efficient and supportive way is what would make an umbrella company tick.
If you tend to gravitate towards brand longevity, our recommendation would be to pick a company with a good reputation and experience
Here are tips on how to choose an umbrella company:
Steer clear of umbrella companies that include joining or leaving fees. An umbrella company should operate like a pay as you go mobile – no minimum contract and you only pay when you use the service.
Avoid companies that link their fees to your per hour or daily rates; these can be costly as your fees shoot up in tandem with rate increases. Most umbrella companies charge a small fixed margin, either weekly or monthly which stays the same no matter what you earn.
Compliant umbrella companies will not encourage to claim expenses without valid receipts or proof of purchase. In the event of an investigation by HMRC, the expense claim would be dismissed, and you would be accountable for all the tax owing the expense claims.
Look out for compliant companies which have been reviewed or audited externally.
Companies with the personal touch. You sure do not want to be pushed from pillar to post speaking to 10 different people having to explain what you want. Completely automated and online-only umbrella companies may turn out to be cheaper, however having a dedicated account manager is crucial, particularly if you are new to contracting. Perhaps, try having a test call and ask a few questions!
As an umbrella contractor, you will become an employee of the umbrella firm. Hence, you should receive a full contract of employment from the company and enjoy all the statutory rights and benefits that UK employees are entitled to.
An umbrella company’s margin is the one thing that separates it from the others. Income tax and National Insurance amounts are set by the government so have no effect on your pay, hence dig deeper and find out exactly what standard of service you’ll get for your money.
Preferred supplier list
Many recruitment companies operate a preferred supplier list, comprising of varied providers that the agency relies on to look after its contractors. When researching umbrella companies, see if your recruiter operates a PSL and opt for a provider from there.