Some umbrella providers can offer you all the help you need to make working as a contractor as smooth as possible.
Specialist providers offer compliant services that ensure you are paid on time and in line with all HMRC regulations.
Typical attributes you should look out for are:
- Contractor Umbrella specialists
- Extensive support during and after business hours
- Same day payments
- Online software for 24/7 ease of use
- Fully compliant with legislation
- Handle all tax and National Insurance contributions and payments to HMRC
What to watch out for
Umbrella companies are not regulated, and if they get things wrong, and your tax is not paid correctly, then you may be liable. Be sure to check the following:
- Are they independently audited by a professional firm?
- Can they provide proof that they are paying your taxes correctly?
- Has an agency recommended them solely because the agency gets a hefty commission from them? (Can they verify any commissions?)
- Has your tax been paid correctly to HMRC? (Check your online tax account)
- Do they pay out ALL of your holiday pay due to you?
- If you opt-in to a pension, has the money from day 1 gone into your pension account? (Check your pension provider)
- Have they asked you to opt out of the Conduct Regulations? (They should not do this).
- Will they pay you each week, irrespective when they get paid by the agency?
- Are they currently under investigation by HMRC?
- Are they promising "take home pay" that seems to high compared with other providers?
If you are unsure about using an umbrella then ask to go onto an agency payroll.
You can find out more about umbrellas in our full set of umbrella guides.