Contractors seeking an umbrella company solution might be interested to learn of the launch of Springboard Umbrella, a contractor umbrella solution that is being offered free of charge, at least for the life of new clients’ first contracts. But how can it provide contractors with a professional, efficient and compliant service for free?
Marcus Glover, Managing Director and founder of Springboard Umbrella, tells ContractorCalculator that the firm is well funded and resourced, which means it can afford to play the long game of investing heavily now to gain market share.
“We’re totally up front with contractors and guarantee that we will offer an efficient and compliant service for no charge,” explains Glover. “That offer will remain valid for at least the life of every contractor’s first contract. When we reach our target number of customers, that’s when we will start charging. And even when we do charge, contractors who are part-way through a contract will continue to receive the same service for free until that contract expires. They will then have the choice to leave with no penalties.”
Why an umbrella company, and why now?
But surely the long-term strategic future of the umbrella company sector is in doubt, what with the Agency Workers Regulations arriving within two years and HMRC’s apparently ongoing interest in umbrella company expenses. Why launch an umbrella company now?
Glover points to his own market research into contractors who have contracts inside of IR35 and are most likely to choose an umbrella company as their trading vehicle. He says that 85% of them only need a basic, ‘no-frills’ service, as they bill for a standard working week and only claim expenses for travel to and from work and lunch, usually within HMRC scale rates.
He explains: “The thought behind Springboard Umbrella is that the majority of contractors don’t need a complex and personalised service offering and therefore don’t need to pay for the additional overheads such a service brings. As for the Agency Workers Regulations, assuming they are not repealed by a new government before they come into force next year, they won’t stop contractors needing a trading solution of some sort and Springboard will be in a position to deliver that solution.”
No frills but plenty of service
A three-tier service is offered by Springboard Umbrella. Glover explains: “The vast majority of contractors who only submit a weekly timesheet and expenses according to HMRC’s scale rates are likely to choose our mostly automated online service. When we start charging, they will only pay a modest fee. The other tiers will offer greater degrees of service to reflect contractors’ more complicated requirements.”
Whilst Glover is happy to describe his service as “no frills”, he doesn’t want Springboard Umbrella likened to the low-cost airline industry. “With most low-cost airlines, the passenger starts with a low, low price. But if they want to choose where to sit, or to check baggage or to enjoy some refreshments, then the cost keeps ramping up. We don’t do that, for example we offer comprehensive insurance as standard. What the contractor signs up for is what they pay for the duration of the contract, unless their contracting behaviour changes radically.”
The thought behind Springboard Umbrella is that the majority of contractors don't need a complex and personalised service offering and therefore don't need to pay for the additional overheads such a service brings
Marcus Glover, Springboard Umbrella
He says that contractors with uncomplicated contracts who use Springboard’s automated online processing model should be rewarded accordingly. “But,” he insists, “our customer service team is available with expert assistance should it be needed.”
Cost of compliance
Springboard Umbrella is investing in providing reassurance to its clients. The company has been audited by Lawspeed under the SPA Scheme and the full audit is available on request from them, is an APSCo-approved umbrella company and is shortly to undergo an audit by Professional Passport.
“We’ve no track record in the umbrella company sector so why should contractors trust us and our promises?” Glover explains. “Securing compliance approvals from key industry bodies that are the de facto regulators is as hugely important as it has been expensive, but both our investment and the successful audits demonstrate our commitment to contractors.”