Considering working for an umbrella company?

Considering working for an umbrella company?

There comes a point when most people will want to consider alternatives to being an employee. Working for someone else can sometimes be unrewarding, particularly if there is something else that the worker would prefer to do. One alternative is to become self-employed, but there are many aspects of working for oneself that puts people off. The administration involved can be time consuming, and establishing a new business can be a big risk for those who have not yet made a name for themselves in their field.

Why consider an umbrella company?

An umbrella company is ideal for those who want to make the transition to self-employment but are concerned about issues such as taxation. When contractors register with an umbrella company, they are – to all intents and purposes – their own boss. Individuals will choose their own clients and their own workload and decide on their own working hours. At the end of the week or month, they will submit a timesheet to the umbrella company with the details of the work that they have done, and this will then be processed in-house.

The company will invoice the client, take responsibility for chasing payments and then pay the contractor. The monies received by the contractor will be minus the fees for the company and minus tax and national insurance, which is dealt with on a PAYE basis. There is no need for freelancers to worry about self-assessment, as they are officially employees of the umbrella company, even though they retain their independence.

An umbrella company is also a great choice for those who are taking freelance work for a short period of time, as it means that there is no need to register as self-employed with HMRC. If a new job opportunity comes up, then the individual can easily take up the offer.

Advantages of an umbrella company

The administrative support which is offered by an umbrella company is one of the main advantages of using the services of such a company. When starting a new business, there is a great deal of paperwork to be done and kept in order. This can eat into either time with the family or working time, so usually something has to give. By using an umbrella company, the contractor is able to hand over boring administration to someone else in order to concentrate on his or her new business and find clients.

Dealing with clients that do not want to pay invoices can also be difficult when first starting out. There are always those that want to quibble over the bill and put off paying for as long as possible. An umbrella company will use professional staff who are used to dealing with this type of situation and find the fastest solutions for all concerned.

The freedom to choose the type of work an individual would like to do is one of the biggest plus points of self-employment. When working for somebody else, there is often very little choice, but freelancing means that the contractor is able to choose the work that he or she loves and concentrate on finding clients in that field.

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