Login with GoogleWhich Umbrella company is best?
The UK’s self-employed workforce has grown significantly, reaching 4.2 million individuals. With this surge, the number of umbrella companies has also risen, offering freelancers, contractors, and sole traders a variety of choices. If you’re new to this work structure or considering a change, the challenge lies in distinguishing one umbrella company from another. To guide you through this decision-making process, we’ve outlined key factors to focus on when comparing umbrella companies.
There are many things to consider when trying to find the best umbrella company for you. First, ensure that the umbrella company provides contractors with an overarching contract of employment, granting access to rights and benefits like sick pay, holiday pay, and maternity/paternity pay. Verifying their status as a genuine employer is crucial to securing what you’re entitled to. Avoid potentially non-compliant providers by scrutinizing take-home pay after tax. Unrealistically high earnings, especially above 80%, may signal non-compliance with tax regulations, potentially leading to substantial tax bills later on.
Research the payment processing system, focusing on speed and reliability. Also, understand the expenses system, ensuring the company only accepts legitimate claims. Non-compliant providers may allow invalid claims, risking trouble with HMRC. Be aware of the margin retained by the umbrella company for its services. This information should be clearly displayed on your pay statement, helping you understand the cost of the services provided.
Tax compliance is essential. Choose a fully compliant umbrella company that handles correct tax deductions, relieving you of tax-related concerns. Be wary of non-compliant tax avoidance schemes claiming to be umbrella companies. Investigate the company’s reputation through customer reviews on platforms like Rectools.io . Feedback from other contractors and recommendations from recruitment agencies can provide valuable insights into the quality of service. Here you can find a list of tax avoidance scheme enablers, promoters and providers. Avoid these!
You should also consider the time it takes to start working through the umbrella company and the frequency of payments. Assess service levels, including the onboarding process, account manager assignment, issue resolution, and any service level agreements in place. Check if your recruitment agency operates a Preferred Supplier List (PSL) and, if so, consider selecting an umbrella company from that list. PSLs typically consist of trusted providers recommended by the agency.
Dedicate time and effort to find an umbrella company that aligns with the outlined criteria. The right choice can make the difference between compliance and non-compliance in this dynamic work landscape.
By thoroughly examining these factors, you can confidently select an umbrella company that meets your needs and ensures a compliant and seamless working experience.
Good luck!!