If you’re a self-employed contractor, you’ll know that managing your finances and taxes can be tough. As well as working to impress your clients, you’ve got to worry about paying your bills on time and bookkeeping to stay compliant with the government. It would be impossible to enjoy the benefits of self-employment without some downside, but the overwhelming signs point to working with an umbrella firm to reduce your administrative duties and save time…
When you work with a professional umbrella contracting company, you can set up within a couple of hours and get to work. Rather than setting up your own company, employing an accountant, and dealing with Companies House, everything will be managed for you from day one, so you can stay focused on building a name for yourself and keeping clients happy.
Though you’ll need to keep your timesheets in good working order, other than that, invoicing, administration, chasing payments, and processing your payroll will all be covered by your umbrella firm. This is perhaps the biggest benefit; you can spend your free time working on more client projects, or relax and unwind with your friends and family. Time is very precious!
Great for short-term
If you’ve picked up a short-term contract and don’t know how long it’s going to last, setting up a small business or submitting your own tax returns can be a burden. Umbrella firms are also great if you’re working on a modest hourly contract rate, as the costs associated with an accountant far outweigh their benefits. Most umbrella companies, on the other hand, are an affordable option for contractors of all backgrounds, keeping money in your pocket.
Not sure whether contracting is the right lifestyle for you? Dipping your toes into contracting via an umbrella company is a low-risk option. If you decide you’re not happy working as a contractor, you can withdraw without costs; if you grow to build a successful business, you can switch to a limited company and a later date, and your umbrella company could help.
Classed as an employee
Another benefit of working with an umbrella company is that you will be viewed as an employee and be paid via PAYE, meaning you can enjoy the benefits of being employed, with the benefits and freedom and of benign a contractor. Things such as sick pay, holiday, redundancy and maternity leave can be factored into an umbrella service agreement.
Are you considering making the switch from running a self-employed business to working under an umbrella company? Do you have any questions about your current circumstances? Stay tuned for more advice on our blog, where we’ll give you the lowdown on everything you need to know about contracting, every week.