Contracting Under An Umbrella Company

An Umbrella service or company acts as a in-between for your contracting services. Essentially you enter into a contract with the Umbrella company that makes you a PAYE employee. Your end client or representing agent then also enters into a contract with the Umbrella for your services, they pay the Umbrella Company which then pays you as an employee.

Benefits Of Using An Umbrella Company

For the cautious contractor an Umbrella Company is very easy to use, all tax and NI is deducted before you get paid, you are a PAYE employee. You need do nothing more than send send in timesheets and expense claims and wait to be paid by the Umbrella.

The Downsides Of Using An Umbrella Company

With simplicity comes expense, unfortunately operating under an Umbrella Company is the most expensive way of working in terms of both income Tax and NI.


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