8 useful questions to ask your umbrella company

Before completing the registration process, it’s a good idea to write a list of questions to ask your umbrella company. If you’re happy with their responses, you should have nothing to worry about and can move forward with confidence. However, if you have concerns – shop around and use another provider. You must choose an umbrella company that gives you complete peace of mind. We recommend the following 10 useful questions to ask your umbrella company – before agreeing to register with one.

Can I have an accurate calculation?

It’s only fair that an umbrella company provides you with an accurate take home pay projection, and most of them will. However, a few have been known to deliberately inflate pay retention as a way of tricking contractors into joining them. Make sure any umbrella company calculations you get have taken the correct working days into account, your rate, tax code, and do not include umbrella company expenses.

Do they process PAYE?

Compliance with UK tax law is critical. Compliant umbrella companies will process their employees’ payroll in accordance with the government’s system ‘Pay As You Earn’ (PAYE). Any company operating a different payroll system should be avoided at all costs – because they’re almost certainly a tax avoidance scheme. Tax avoidance schemes are evil, and if you use one – the consequences could be severe.

Are they accredited by a respected industry body?

In a crowded marketplace, you must choose an umbrella company that is compliant and has an excellent reputation. We recommend choosing an umbrella company that has achieved accreditation from the Freelancer & Contractor Services Association (FCSA). The FCSA is the UK’s most recognised professional body dedicated to ensuring the supply chain of temporary workers is compliant and ethical. If an umbrella company is FCSA accredited, they’ve been able to prove they operate compliantly with UK tax regulations and law – and you’ll be in safe hands.

How do I submit timesheets?

Using an umbrella company for your payroll is the easiest way for contractors and freelancers to get paid. Well – it should be. Check that it is easy to submit timesheets and don’t have any additional administration to worry about. Most umbrella companies will provide their employees with access to a state-of-the-art app to submit the hours worked, or they’ll have a dedicated mailbox for the submission of timesheets. Check you’re happy with their procedures before committing to their services.

How long does it take to register?

Registering with anything can be annoying. However, umbrella companies must ask a series of questions to pay you legally. Therefore, it is in your interest to choose an efficient umbrella that’ll help you sign up quickly! Usually, you can sign up directly online or via the phone.

Are there any extras to using your service?

The umbrella marketplace is crowded, and there is a lot of competition. This isn’t a bad thing for contractors. Plenty of umbrella companies have started offering their employees “extras” to entice them to choose their payroll service. Extras can include Same Day Faster Payments, employee discount schemes, special offers upon sign up, and more! Have a look and see what’s on offer. Some of our top 10 umbrella companies have fantastic offers on at the moment.

Are there referral rewards if I get my friends and colleagues to join?

Many umbrella companies will offer special rewards to employees that successfully refer a friend or colleague to them. For example, you may be able to benefit from a couple of weeks with no margin. When you’re enquiring about an umbrella’s service – ask them if they’re running a referral promotion because it could be an excellent way for you to get additional value from them.

Is it possible to switch between your umbrella and my limited company – quickly and cost-effectively?

Changes to off-payroll in the private sector (IR35) have contributed to a rise in demand for umbrella companies. However, these changes do not mean the end of limited company contracting. If you’re used to operating through a personal service company (PSC) and you find yourself inside IR35 – don’t panic. Just because you need an umbrella company for a short time doesn’t mean you need to use one forever. Please speak with the umbrella and make sure there it’s easy to switch back to your limited company when you’re able to. In theory, you should be able to switch between limited and umbrella as little or often as you please. The umbrella’s margin will only apply when they pay you, and there shouldn’t be any joining or leaving fees.

Top 10 umbrella companies

So, there you go – 8 useful questions to ask your umbrella company before you commit to their service. Hopefully you’ve found this useful. We suggest you check out our top 10 umbrella companies. They’re all FCSA accredited, and some have excellent offers at the moment.

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