Best Umbrella Company- 10 Tips for contractors to choose
The PAYE Umbrella Company solution is the best option for new contractors or those who want to try their luck in contracting business. However, this solution is not as tax efficient as the limited company is yet it offers simple and hassle-free contracting option for contractors. There are few tips, which would be helpful to contractors in selecting a right Umbrella Company for them. You should visit our full site at http://umbrellacompany.uk.com for more information
1-Make sure that Umbrella Company is the right solution for you
The first question comes in the mind of a contractor is that Limited or Umbrella, which option to choose. You should look for the best payment solution that fulfills your needs. It is advised to discuss your requirements with Umbrella and limited company’s service centers to get a professional advice. This would definitely help the contractors to select the most viable payment structure.
2-Look into the background of Umbrella Providers
After you have decided to go for Umbrella solution, the next step is to gain information of particular Umbrella Companies regarding their previous history. It may include their credit rating and overall experience. If the Company is known for transferring the money offshore, it is not a legitimate Umbrella Company.
3-Try to know everything about their fee structure
Mostly Umbrella Companies are fare about their fee structure but some of them are not transparent enough. It should be clarified whether the fee includes all the charges or there are other charges, which would be demanded later. These extra charges may include fee of tax form completion, expenses process fee and other similar deductions.
4-Does your future Umbrella provider offers full employment contract
An Umbrella Company is the employer and the contractors are its employees. This relation is developed by signing the overarching contract of employment between them. The contractor should receive a full contract of employment in order to gain the benefits of employment, which are offered to permanent employees working in UK. Therefore, it is imperative to check before joining an Umbrella Company that a contract of employment is offered.
5-Find out about the policy regarding expenses
Umbrella Companies advertise that a contractor can increase their take-home pay by reducing their tax. This is proposed to achieve by claiming the business expenses. However, it depends on the mode of your contracting business and most important thing is to submit the original receipts to claim such expenses. If wrong claims are made, it would result in HMRC investigation and later on may appear as financial penalties. As far as the dispensations are concerned, it simply means that the Umbrella Company needs not to submit the P11D form regarding its every employee (contractor).
6-Payment methods
Look for the Company that is known for delivering payments within minimum time. Most of the companies pay when they are paid from agencies hence it may cause an unwanted delay. However, top rated companies are efficient in processing your invoices and minimize the time for monetary transaction.
7-Paper work regarding tax matters
A contractor is bound by law to submit tax return and if the company does not offer dispensations, it is the duty of such contractor to submit P11D form. Therefore, look for such company that would take the responsibility to help you out in these matters.
8- Leaving the Umbrella Company
Being an employer of a contractor, an Umbrella Company should not charge any fee when you decide to leave it but there are certain clauses, which allow them to charge few penalties. Therefore, read the clauses carefully regarding notice period and termination.
9- What kind of support is available?
The credibility and the attitude of your company is the most important thing to search out. The Umbrella Company should help and support its contractors when anything goes wrong. It may happen that a client falsely accuses a contractor for misconduct, the Umbrella provider must take a stand for the rights of such contractor. The HR department of an Umbrella Company should be qualified and supportive so that a contractor can seek their help without any hesitation.
10-Umbrella Company checklist
By using Umbrella Company checklist, you can compare the features of different companies and select the right Umbrella Provider that is suitable for you in all aspects.
1-Make sure that Umbrella Company is the right solution for you
The first question comes in the mind of a contractor is that Limited or Umbrella, which option to choose. You should look for the best payment solution that fulfills your needs. It is advised to discuss your requirements with Umbrella and limited company’s service centers to get a professional advice. This would definitely help the contractors to select the most viable payment structure.
2-Look into the background of Umbrella Providers
After you have decided to go for Umbrella solution, the next step is to gain information of particular Umbrella Companies regarding their previous history. It may include their credit rating and overall experience. If the Company is known for transferring the money offshore, it is not a legitimate Umbrella Company.
3-Try to know everything about their fee structure
Mostly Umbrella Companies are fare about their fee structure but some of them are not transparent enough. It should be clarified whether the fee includes all the charges or there are other charges, which would be demanded later. These extra charges may include fee of tax form completion, expenses process fee and other similar deductions.
4-Does your future Umbrella provider offers full employment contract
An Umbrella Company is the employer and the contractors are its employees. This relation is developed by signing the overarching contract of employment between them. The contractor should receive a full contract of employment in order to gain the benefits of employment, which are offered to permanent employees working in UK. Therefore, it is imperative to check before joining an Umbrella Company that a contract of employment is offered.
5-Find out about the policy regarding expenses
Umbrella Companies advertise that a contractor can increase their take-home pay by reducing their tax. This is proposed to achieve by claiming the business expenses. However, it depends on the mode of your contracting business and most important thing is to submit the original receipts to claim such expenses. If wrong claims are made, it would result in HMRC investigation and later on may appear as financial penalties. As far as the dispensations are concerned, it simply means that the Umbrella Company needs not to submit the P11D form regarding its every employee (contractor).
6-Payment methods
Look for the Company that is known for delivering payments within minimum time. Most of the companies pay when they are paid from agencies hence it may cause an unwanted delay. However, top rated companies are efficient in processing your invoices and minimize the time for monetary transaction.
7-Paper work regarding tax matters
A contractor is bound by law to submit tax return and if the company does not offer dispensations, it is the duty of such contractor to submit P11D form. Therefore, look for such company that would take the responsibility to help you out in these matters.
8- Leaving the Umbrella Company
Being an employer of a contractor, an Umbrella Company should not charge any fee when you decide to leave it but there are certain clauses, which allow them to charge few penalties. Therefore, read the clauses carefully regarding notice period and termination.
9- What kind of support is available?
The credibility and the attitude of your company is the most important thing to search out. The Umbrella Company should help and support its contractors when anything goes wrong. It may happen that a client falsely accuses a contractor for misconduct, the Umbrella provider must take a stand for the rights of such contractor. The HR department of an Umbrella Company should be qualified and supportive so that a contractor can seek their help without any hesitation.
10-Umbrella Company checklist
By using Umbrella Company checklist, you can compare the features of different companies and select the right Umbrella Provider that is suitable for you in all aspects.