With the private sector off-payroll rules due to hit the contracting sector in April 2020, an industry expert explains what PAYE umbrella companies can offer contractors caught by the changes, and why you should watch out for unscrupulous operators.
Business Structures - Umbrella Companies
Virtually all IT contractors work via limited or umbrella companies. In this section, we explore how PAYE umbrella schemes work.
If you’re working through an umbrella company, you may have noticed deductions on your payslip for the Apprenticeship Levy. Here we explain what this charge is, and how it is calculated.
The number one question many umbrella companies are asked by their employees is: “why am I paying employers’ national insurance contributions?” – here we provide the answer and explain what other costs are payable by umbrella contractors.
Almost all contractors who provide professional services to clients trade via their own limited companies, or join PAYE umbrella schemes. Here we’ve compiled a table to help compare the pros and cons of each structure.
Contractors receiving their first umbrella company payslip can sometimes find it challenging to understand exactly how their pay has been calculated and what deductions have been made. However, the actual payslip is fairly straightforward to understand once you know what to look for.
If you search the web for potential umbrella company providers, you’ll often find advertisements claiming to offer 90% or more take home pay after tax – using ‘compliant’ schemes. Here we examine why contractors should approach such schemes with caution.
If you decide to contract via an umbrella company, you will be entitled to receive holiday pay (as an employee of the company). Here we look at what holiday pay is, and how it is calculated.
Which type of business structure should you use? A basic overview of how limited and umbrella companies work, and some of the pros and cons of using each stucture.
Our complete guide to choosing an umbrella company; how a typical PAYE scheme works in practice, and key questions to ask prospective providers.
The only legitimate way PAYE schemes can compete with each other cost-wise is in the fees they charge their contractor clients. Here, we compare some of the leading umbrella companies, and explain why you should look out for hidden charges.