Are you currently a freelancer or a contractor? Perhaps this is a route you are considering going down?
If so, you should definitely consider using the services of a top quality contractor umbrella company. Doing this will make your life a lot easier.
After all, the world of contracting can take a little bit of time to get used to, especially for someone who has been in traditional employment all of their life.
This is not to say that contracting or freelancing isn’t a great solution. There are many perks associated with going down this route.
However, knowing about umbrella companies and what they can do for you is extremely beneficial. So, keep on reading to find out more…
Guide To Contractor Umbrella Services
First and foremost, it is imperative to establish what a contractor umbrella company is. If you decide to use the services of such a company you will essentially become one of their employees. Consequently, they will take care of all of the ‘boring stuff’ – i.e. your paperwork and your taxes. Literally all you need to do is submit your timesheet as well as your expenses. Once you have done this, the umbrella company in question will handle all of your invoices for you. They will ensure your taxes are paid. Once everything is complete, they will place your net profit into your bank account for you.
The benefits associated with this service if you have been taken on through contract labour hire are there for all to see. Convenience will be enhanced and you can focus on doing what makes you money, rather than worrying about taxes and invoices. In addition to this, you will find it much easier to budget. After all, you will receive your net profit. This is significant, as you don’t need to set money aside for tax payments.
There are two important points you should be aware of in relation to umbrella companies. The first is that you should always go for a business that is based in the country you are based in. There are many companies that advertise their services to a specific audience audience yet are situated offshore. They may offer a cheaper service, yet how can you be certain that everything is handled in compliance with the law?
The next thing you need to be aware of is the fact that these companies cannot lower your tax bill. This is impossible. However, you will find many companies who claim they can do so. They try and entice you to use their services by promising tax deductions and alike. Yet, taxes are imposed by the government, and therefore there is no way an umbrella company can lower your charges. The only differentiation in cost is in relation to the fees charged. You can expect to pay on a weekly or monthly basis.
Main factors to consider when finding the umbrella company for you
Whilst the benefits of using an umbrella company are evident, you need to choose one with care. There are many umbrella companies available for you to choose from nowadays. Don’t go for the first one you find. Instead, consider all of the following points carefully…
How much does the umbrella company charge for their services? Take a look at several companies to get a feel for the average price being charged. One important thing to note is that umbrella companies cannot lower the amount of tax you pay. There are a lot of companies who make false promises to do this. However, the rates are set in place by the government, meaning they do not have the power to do so. The only way you can distinguish who presents the best deal in monetary terms is to assess the fees being charged.
If you take a look on the Internet you will see that there are umbrella company league tables. These rank umbrella companies based on various criteria. They will interview individuals to accumulate their data. Thus, they will ask questions about customer service, price, proficiency of payroll team, joining process, leaving process, whether they would work with them again, and so on and so forth. It’s worth taking a look at these to see where the company you are considering ranks.
How quickly will you be paid?
The only thing you need to do is submit your timesheet to the company in question. It is important to know how soon you can expect to be paid once you have done this. You should be looking for a company who processes your net profit within a few days. After all, one of the reasons for using an umbrella company is to save time, thus make sure the company you select actually does this.
What have previous and current customers had to say about the umbrella company you are considering? It is advisable to read reviews that have been left by others. You will be able to gain an honest insight into the company and the service they provide. Do they live up on their promise of a quick payment? Are they easy to get in touch with? By doing this you will be able to pick up on any red flags and stay away from a company with a negative reputation.
Last but not least, it is important to go for a company that’s informative and keeps you in the know. After all, for those new to contracting the process can be quite confusing, especially when taxes come into play. The company should go to the effort of making sure you understand everything that goes on.
Hopefully you now know everything you need to in regards to umbrella companies. It is plain to see that there are lots of benefits to be gained by going down this route. Yet, you do need to be cautious when choosing the right company for you.