When an umbrella company goes bust or files for liquidation, hundreds of contractors can be left without pay. This worrying scenario can cause umbrella contractors a great deal of concern, but there are ways to mitigate the problem, by catching the warning signs early on.
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
- Which structure is best for you? Limited or Umbrella?
- Umbrella company comparison - 15 top tips
- Use our Umbrella Company Calculator
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.
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.
What are umbrella company margins?
As an umbrella employee, you will see an entry for your provider’s ‘margin’ on your payslips. Here we explain what an umbrella company’s margin is, and how much it will typically set you back.
Umbrella company employment costs and other deductions
If you work via an umbrella company, you will see deductions including ’employment’ costs’ on your payslip. Here we explain what these costs are, and what to look out for following recent cases of malpractice in the industry.
How to change umbrella companies – a stress-free guide to switching providers
If you’re currently an umbrella company employee but are 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.
Umbrella companies – how preferred supplier lists work
Recruitment companies often operate preferred supplier lists of umbrella companies they work with. Here we consider how a PSL works in reality, and what happens if a candidate wants to use a different umbrella.
Agency Workers Regulations (AWR) – guide for umbrella company employees
The Agency Workers Regulations (AWR) were introduced in 2010 and came into effect on the 1st of October 2011. Although the legislation is complex, the premise is simple: to protect temporary workers employed through staffing agencies.
The Top 10 umbrella company questions – asked by employees
Here is a list of the Top 10 most commonly asked questions by umbrella company employees, based on our experiences of working with umbrella providers (and contractors) over the past 10 years.
National Insurance hike – double pain for umbrella company contractors
The planned April 2022 National Insurance 1.25% hike will be painful for almost everyone in employment. But, not for the first time, umbrella company workers are in line for more pain than most.
Limited company or PAYE umbrella – advantages and disadvantages
Almost all contractors who provide professional services to clients trade via their own limited companies, or join a PAYE umbrella. Here we’ve compiled a table to help compare the pros and cons of each structure.