Compare umbrella companies in 5 simple steps
A fairly modest offering of one or two providers in early 2000 has now grown into a multi million pound market, with more than 150 umbrella companies jostling for your custom.
Freelancing has become THE career choice for many skilled professionals and the umbrella marketplace is set grow even further. But with most providers claiming to be the UK’s number 1, how exactly do you compare umbrella companies?
Before we dive into our top 5 list, it’s probably a good idea to clear a few things up.
1. Regardless of what you may have been told, your take home pay will be broadly the same no matter what umbrella company you decide to join.
2. A dispensation does NOT allow you to claim a limitless number of expenses that you didn’t actually incur.
3. Your recruiter may well have suggested that you take a look at one or two umbrella companies. You are however under NO legal obligation to join one just because they “prefer to work with” an umbrella company on their Preferred Supplier List (PSL).
Lets now take a look at what you should be comparing:
The single most underrated component of any umbrella company. You could be working with the cheapest most customer-savvy provider, but if they’re operating in a non-compliant way, there’s a strong chance you could fall foul of HMRC. Look out for ‘badges of compliance’ – there are several companies such as Qdos EBS, Professional Passport and AEMC that undertake an annual audit of umbrella providers to ensure they’re systems and processes adhere to HMRC standards.
2. Customer Service
Second only to compliance. No matter how much technology your umbrella company may throw at you, there will always be times when you need to speak to a real person. Ask if you’ll have your own Account Manager or a single point of contact with either a direct dial contact number or at the very least an email address.
You may be surprised that this is only third on our list. With the economy the way it is, most of us have learnt to be a little more price sensitive with our products and services. When you attempt to compare umbrella companies however, it’s not quite as simple as signing up with the cheapest. Ask for their BEFORE TAX admin fee as many providers now quote their after tax (or net) price to appear cheaper. You should also stick to companies that offer a fixed fee service, steering well clear of % based providers or companies that tie you in for more than a weeks notice.
If you’re working through a recruitment agency, it’s now the norm to have at least £10m Public Liability, £2m Employer’s Liability and £2m Professional Indemnity Insurance. Some umbrella companies charge a comparatively low admin fee but then sting you with an additional charge for insurance. You’ve been warned.
5. Sundry Extras
These can range from gift vouchers to branded stationery and are really only important if they provide value to you personally. Most umbrella companies nowadays will have an on-line portal where you can submit your hours and expenses each week. Some of the more cutting edge providers have even introduced iphone applications for communicating with their contractors.
So that’s it, now you can compare umbrella companies in 5 simple steps. You’ll probably need to allocate at least 30 minutes from beginning your search to signing up with an umbrella company. Try to make the right choice first time out. Although it’s pretty easy to transfer from one umbrella company to another, most contractors choose to sweat it out and end up ‘tolerating’ a poor service year after year.
Our personal favourites
You didn’t think we’d let you go without pointing you in the direction of some of OUR favourite umbrella companies did you? Well, you certainly won’t be disappointed if you choose to sign up with one of these:
One Consulting – Umbrella, limited and alternative company structures
Cloud9 Umbrella – Hot Damn! You get a single point of contact from day one
Simplify Umbrella – Providers of an AWESOME customer service
Crystal Umbrella – The fastest growing umbrella company in the UK
SmartWork.com – Open 8 till 8, SEVEN DAYS A WEEK!
You can of course sit back, relax and have someone call YOU to explain how this all works. If so, simply add your details below and one of our recommended umbrella companies will come back to you in a jiffy.
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