With the private sector off-payroll rules due to hit the contracting sector in April 2021, an industry expert explains what PAYE umbrella companies can offer contractors caught by the changes, and why you should watch out for unscrupulous operators.
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.
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.
How an umbrella company payslip is generated, and what the deductions refer to – using real-life example payroll data. Plus an example.
One of the biggest sources of confusion for new umbrella company users lies in the way contractor pay rates are quoted. Does your rate include ’employment costs’, and if so, what does this mean? And are some unscrupulous providers misleading over the so-called ‘inside IR35 rate’?