Is the Umbrella Company route right for you?

The in’s and out’s of umbrella companies

If you are thinking about becoming a contractor and don’t want the hassle of endless amounts of paperwork, operating through an umbrella company is a very attractive option.

We are experts in payroll and help many people just like you navigate through the ins and outs of using this method. If you want to find out more about our compliant Umbrella PAYE Solution, call one of our experts on 01923 521 097 and they will be happy to help.

We have summarised some of the key things that you need to know, including:

  • What is an umbrella company?
  • Expenses
  • IR35

Our Umbrella PAYE Solution

Our straightforward Umbrella PAYE solution is ideal for contractors who don’t want the burden of mountains of paperwork but still want to be paid in the quickest and most efficient way possible.

As a user of our Umbrella PAYE Solution, you’ll receive access to your secure payment information 24/7, daily faster payments, statutory pay and much more.

At the end of each week/month, the agency or client will need to submit a summary of the hours that you have worked so that we can raise an invoice. Once the invoice is paid, we will pay you (less tax and national insurance deductions) via Faster Payment the same day.

If you are working in construction, you might also be interested in our Umbrella CIS solution.

What is an Umbrella Company?

Operating under an umbrella company is the primary alternative to starting your own limited company.

When operating in this way, you are working as a PAYE employee rather than as a director. Whilst as the director of a limited company you can utilise a number of tax saving benefits, you’ll have some additional paperwork to do for the privilege.

Going down the umbrella route you are employed by the umbrella company but are still in charge of where you work and how long for, just like contractors who choose to operate through a limited company. However, the majority of the paperwork that you would usually have to complete is done for you, meaning that you can focus more of your time on your usual day to day tasks.

The general processes of working this way is quite straightforward, so it’s ok; you won’t be overwhelmed with complex jargon or mountains of paperwork. Once your contract is agreed, you will need to log a timesheet and forward it to us and we will use it to invoice the agency or client for the hours you have worked.

Once your agency or client has paid the invoice, we will forward the payment to you minus any tax and NI due and administration margins.

Claiming expenses

There are two types of expenses, chargeable and non-chargeable. A chargeable expense is one that your client or agency has agreed they will reimburse you for and this will need to be taken into account when your invoice is raised.

On the other hand, a non-chargeable expense is one that you incur but cannot charge the agency or end client for. However, these can be deducted from your gross pay before calculating your tax.

The expenses that you claim will largely depend on the nature of work; however here are some common examples:

  • Travel expenses – 45p per mile for the first 10,000 miles in a tax year and then a reduced rate of 25p per mile thereafter.
  • Accommodation – If you are working away from your usual place of work, you can claim back the cost of your accommodation. The cost needs to be reasonable, so don’t stay in a £1,000 per night hotel as this may not be an allowable expense.
  • Stationary
  • Training costs
  • Umbrella company fees

We will provide you with a jargon-free guide to claiming expenses to help you understand exactly what expenses you can claim. We’ll also work closely with you to ensure that your expenses don’t result in you being paid less than the national minimum wage.

What is IR35 and does it affect me?

You may have heard the word IR35, it is a piece of legislation that took effect from April 2000 and is designed to prevent contractors from working as disguised employees.

For example, a permanent employee may decide to resign from their job on a Friday, only to return to the exact same role as a contractor on the Monday and thus take advantage of the tax saving benefits that come hand in hand.

How do I know if my contract is inside IR35?

In a nutshell, if you have the same benefits and control as a permanent employee, your contract would most likely be classed as inside IR35. For example, if you are entitled to a company pension scheme and have right of dismissal of permanent members of staff, your contract could be caught by IR35.

Umbrella companies and IR35

By operating under an umbrella company and using Futurelink Group’s Umbrella PAYE Solution, the rules of IR35 do not apply to you. As a result you can focus your attention on working as a contractor and you won’t be issued with an additional tax bill should your contract be classed as inside IR35. For a more comprehensive breakdown on IR35, please download our IR35 legislation guide.

If you choose not to operate in this way, you may be interested in our Limited Company Solution that contains an honest assessment of your contract within IR35 regulations.

Now that you understand more about umbrella companies and the benefits that they bring, please call us on 01923 521 097 or visit our Umbrella PAYE Solutions page for more information on how we can help.

 

“I’ll most certainly pass on your details to people I know. You run a great service there, keep up the good work.”

William Cadden, Self-Employed Contractor

“For me, Futurelink Group was the best solution, as a foreign and a lack of knowledge of the UK rules, they were extremely helpful in all aspects. Always fast in answering all my questions. I almost didn’t do anything and they put me on track to invoice and receive my payments. I can fully recommend them.”

Ronaldo, Umbrella PAYE contractor

“WS Contractors Ltd are extremely happy with the services that Futurelink provide. The efficient and friendly staff are always willing to help and assist. The feedback from our operatives is positive and pleasing. We would recommend Futurelink to all new recruits joining our team.”

Michelle Hughes, WS Contractors Ltd

“We at Gemini would like to thank you and your team for all your help and support in connection to payroll solutions. We find Futurelink Groups approach to be responsive to action when required with a courteous and bright manner – keep up the good work!”

Frank Mcfarlane, Gemini Security Services Ltd

We have strict compliance procedures in place, we are ISO:9001 accredited and we also carry out regular independent audits of our processes so you can be sure you are in safe hands. Companies within our group have been accredited with the following:

Futurelink Group consists the following companies, all incorporated in England & Wales: Futurelink Group Ltd (0620 6129), Futurelink Umbrella Ltd (0532 0148), Futurelink Accountancy Services Ltd (0532 0147), Team Construction Ltd (0415 9963), Team Administrative Services Ltd (0493 5270), Horizon RCS Ltd (0620 6202) and Horizon RCS Europe Ltd (0620 6136). Privacy Policy | Terms & Conditions