The government has confirmed that the umbrella company industry will finally be regulated, with new legislation due to come into effect in 2027.
Umbrella Companies
Virtually all IT contractors work via limited or umbrella companies. In this section, we explore how PAYE umbrella schemes work.
- Find out what a PAYE umbrella company does.
- Why you should be cautious when reading umbrella company reviews.
- How much do the leading umbrella companies charge?
- The pros and cons of using an umbrella company.
- Why the scope for claiming umbrella company expenses has narrowed due to the SDC rules.
- What does this mean? Our umbrella company glossary.
- Which structure is best for you? Limited or Umbrella?
- Umbrella company comparison - 15 top tips
- Calculate your net take home pay here.
5 essential tips to help you find the best umbrella
- Don't focus purely on the weekly cost. Good customer service and communication skills are just as important. Ask other contractors for recommendations if you're looking for a new provider.
- Only sign-up to a UK-based PAYE umbrella. Never use offshore payment tax avoidance schemes.
- The only difference between take home pay quotes between umbrella companies should be the margin (fee) they charge.
- If you're caught by the Off-Payroll (IR35) rules, consider a flexible umbrella/limited model of working, so you can switch between the two with ease. Most leading accountants/umbrellas offer this service.
- Find a trusted umbrella in our umbrella directory.
Umbrella company reform 2026: what ‘joint and several liability’ means
From April 2026, HMRC is expected to bring in a new joint and several liability (JSL) rule for supply chains that use umbrella companies. If the umbrella company doesn’t pay the correct PAYE tax or National Insurance, HMRC will be able to recover the full amount from others in the chain – like the recruitment […]
Umbrella companies and holiday pay – how is it calculated?
You are entitled to receive holiday pay as an umbrella company contractor. Here we look at what holiday pay is, and how it is calculated.
How to change umbrella companies – a stress-free guide to switching providers
If you’re an umbrella company employee unhappy with the service you are receiving, how do you change providers? Initially, it may sound rather daunting. However, changing umbrella companies is a straightforward process in reality.
Does IR35 apply to umbrella company employees?
IR35 has had a profound impact on the contracting world over the past almost 25 years. How do these tax rules affect umbrella company employees?
Do umbrella company employees need to file a self-assessment tax return?
You won’t need to complete a tax return unless you have income to declare on top of your umbrella salary. Here we list these additional sources of income.
Why am I paying Employers’ National Insurance as an umbrella contractor?
The number one question many umbrella companies are asked by their employees is: “why am I paying employers’ national insurance contributions?”
What tax do you pay if you’re an umbrella company employee?
When you work through an umbrella company in the UK, you are an employee for tax purposes. This means you must pay income tax and NI on your earnings.
Umbrella companies – ‘gross contract rate’, ‘umbrella rate’, ‘assignment rate’ – what’s the difference?
If you are quoted an umbrella or assignment rate, then this is deemed to meet all employment costs before the taxable salary is arrived at.
The Key Information Document explained for contractors and agency workers
Agencies must provide contractors with a Key Information Document. Learn what a KID covers, how it works in 2025, and what to check before signing.