If you are self-employed, freelancer or a contractor and you don't want to operate or run a limited company, then an umbrella company can do that for you. An umbrella company can take away the hassle of running a company and help you to do the real work for your clients.
You can find a more comprehensive list of umbrella companies for contractors, freelancers and the self-employed on our sister site ContractorUK.
Umbrella companies are a popular method of running a business as a freelancer. One of the reasons freelancers and the self-employed decide to run the company under an umbrella company is because it takes away any risk of getting caught by IR35. IR35 can be a big worry for freelancers and the self-employed, so it’s worth considering your likelihood of being caught by IR35 before joining an umbrella company.
An umbrella company essentially plays the role of an ‘employer’ for freelancers. It takes care of all the administrate burden, allowing freelancers to take on work without the hassle of dealing with running a business.
Here are some of the main benefits of an umbrella company:
Ease administrative tasks
The umbrella company will take care of your paperwork and you won’t need to spend valuable time dealing with administrative tasks. All you have to do it provide a time sheet and expense claims and then wait to get paid.
No hassle with taxes
One of the most annoying and stressful things that the self-employed have to deal with is the taxes. An umbrella company will calculate the NICs that you need to pay as well as other taxes. They will then deduct this from your pay, as an employer would. This minimises the stress of dealing with taxes.
The right partner
An umbrella can be your partner and you can choose from a variety of them. Additionally, there are umbrella companies which will help you find the right solution depending on your salary.
Umbrella companies are also great for those that are taking on contracts which vary in length. They can cater to you, whether your contract is lengthy or short.
More on umbrella companies.