Umbrella Company Pros and Cons - Brookson Ltd

Umbrella Company Pros and Cons

An Umbrella Company provides contractors, freelancers self-employed professionals with a simple, compliant and low risk alternative to setting-up and running your own company.

What is an Umbrella Employee?

If you choose to work through an Umbrella Company, you become an employee of that company. It then contracts out your services to the end client or agency. The umbrella company pays you directly after making the necessary deductions for tax and National Insurance contributions on a Pay As You Earn (PAYE) basis.

You remain an employee of the umbrella company regardless of whether you move to a new assignment, start a project with a new end client or agency or are temporarily between assignments. The choice of umbrella company employer is entirely up to you and you can build up a long-term relationship independent of the client or the agency you are working for.

In terms of administration, there is none. As an employee, it is all taken care of for you. The umbrella company will, however, retain a margin from the revenue it receives for providing your services. This is why, if you are working via an agency, they may offer you a higher rate of pay if you wish to become an employee of an umbrella company than if you were to be paid via the agency payroll.

Despite these benefits, Umbrella working may not suit everyone. Employees will not be able to claim as much tax relief as a limited company director, the timing of the payment will not be in your control. Also, your status in the eyes of the end client may show you as being less established or experienced.

What are the benefits?

Brookson offers a complete solution and can help you take advantage of the benefits of working as an umbrella employee, they include:

It’s quick & easy set up and all you have to do is simply submit your timesheets and expenses through Connect, our secure web portal. All holiday pay and insurance are included.

All tax and national insurance is automatically deducted so there is no need to worry about tax returns or yea-end accounts.

Umbrella working is appropriate for any length of contracts, regardless of how short or long they are.

You can claim back certain expenses for travel, subsistence, tools and equipment

We provide a full health & safety review for every assignment you work on

As a Brookson umbrella employee you will be paid week and receive an SMS to confirm the amount each week.

You’ll benefit from up to £5 million professional indemnity and public liability insurance plus £25 million employee’s liability insurance

You can access specialist financial advice on things like pensions, mortgages and investments through our partner companies.

Our discount scheme gives you savings on the highstreet and online.

Contact Brookson now to find out more about working under an Umbrella Company.

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