An umbrella company acts as an employer for contract and temporary workers. Essentially, the umbrella company takes on employment responsibilities, such as tax and National Insurance contributions so that the worker can focus on their job. Here are ten tips to get the most out of your umbrella company.
Ten Tips to Maximize Your Umbrella Company Experience
Here are ten tips for getting an umbrella company:
- First, check that your chosen umbrella company is accredited. This will give you peace of mind that they are genuine and follow best practices. It has a list of accredited bodies you can check against your chosen company.
- Be aware of the fees charged by your umbrella company. Some companies will charge a monthly fee, while others will deduct a percentage of your earnings. Make sure you know how much you will be paying in fees, and compare this against other companies to ensure you are getting value for money.
- Consider the payment methods offered by your umbrella company. Some companies will offer faster payments if you accept a lower rate, while others may offer slower payments but give you the total amount of your earnings. Choose the method that best suits your needs.
- Check what expenses you can claim through your umbrella company. Many companies will offer to reimburse you for certain business expenses, such as travel and accommodation costs. Make sure you are aware of what expenses you can claim so that you can maximize your earnings.
- Know the maximum amount you can earn before paying tax under the PAYE system. The current limit is £8,616 per year, so if you earn more than this through your umbrella company, you will be liable for income tax at 20%.
- Remember that you are responsible for ensuring that your taxes are paid correctly. Your umbrella company will deduct income tax and National Insurance from your earnings, but it is up to you to ensure that these deductions are correct and up to date.
- Make sure you keep accurate records of all payments made to you by your umbrella company. This will help you to track your earnings and ensure that all deductions have been made correctly.
- Be sure to stay within the law. The rules and regulations surrounding umbrella companies can be complex, so you must seek professional advice if unsure about anything.
- Choose an umbrella company that offers good customer service. This will make it easier to resolve any issues you may have and ensure that you are happy with the service you are receiving.
- Keep these tips in mind, and you will have a positive experience with your umbrella company. With some research and planning, you can ensure you get the most out of your employment arrangement.
Conclusion:
Following these tips should have no problem making the most of your umbrella company experience. Do your research, and compare different companies to find the best fit for you. You can ensure you get the most out of your arrangement and maximize your earnings with a little effort.