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.
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.
‘Rolled up’ holiday pay – new rules since January 2024
Reformed holiday pay rules allow many temporary workers to receive ‘rolled up’ holiday pay – reducing the chances of providers retaining unclaimed funds.
How does an umbrella company work? 10-step walkthrough + examples
Our complete guide to choosing an umbrella company; how a typical PAYE scheme works in practice, and key questions to ask prospective providers.
How to spot the worst umbrella companies
In an unregulated industry, how can contractors keep away from dodgy operators? We look at how to identify the worst umbrella companies.
Government to regulate umbrella companies from 2027
The government has confirmed that the umbrella company industry will finally be regulated, with new legislation due to come into effect in 2027.
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 company expenses – what can you claim for?
If you work via an umbrella, you may incur various expenses while carrying out your work. Here, we look at how expenses are treated for tax purposes.
The Top 10 umbrella company questions – asked by employees
Frequently asked questions by umbrella employees, based on our experience working with umbrella providers and contractors over the past decade.
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.