Umbrella companies have become more popular in the UK since the government changed the way in which an entity’s tax affairs can be dealt with.
An umbrella company is an entity that employs professional contractors to carry out temporary assignments for clients, often recruitment agencies. The umbrella invoices the client/agent and pays the contractor, usually via PAYE, once they have been paid.
The added benefit for the umbrella is the ability to offset some of the costs by claiming back expenses such as travel, incurred as part of the contract.
If you are employed under PAYE, you have the freedom to work as a contractor whilst receiving the full employment rights associated with PAYE, whilst your income tax and National Insurance contributions are deducted and paid on your behalf.
If you’re interested in taking advantages of working in this way, you just need to register with us as an employee, and we’ll do the rest!
Calculate your pay when working through Umbrella
The umbrella calculator assumes:
• Holiday pay advanced
• No pension contributions
• A margin of £15/week
• No expenses claimed
• Working 46.4 weeks per year