As more and more contractors shop around the umbrella company market looking for a payroll provider, we wanted to help out and share our knowledge on umbrella company special offers. Some umbrellas are offering excellent, legitimate deals for new clients. However, others are deliberately being misleading and unethical in their sales approach. Keep reading, and we’ll explain what makes a good umbrella company special offer and what you should avoid.
Good umbrella company special offers
The umbrella company marketplace is thriving. Due to changes to off-payroll legislation (IR35), more and more contractors have found themselves requiring an umbrella company’s service. Therefore, where there is high competition for business, there are some wonderful offers out there. We’ve summarised what makes an umbrella company special offer a legitimate special offer below.
The only thing that should vary between compliant umbrella companies is the margin they deduct for processing your payroll. Therefore, the lower the margin, the better. If you see an umbrella promoting a special low margin of only £X.XX per week – this is a legitimate offer that may help you retain a few extra pounds each week.
Specific period for free
We’ve noticed some compliant umbrella companies have offered a couple of weeks for free – for new clients. This means their margin will effectively be £0.00 for the specified timeframe. This could be a great way to make a saving. However, always check what the margin will be after the free period concludes – as it may be higher than a majority of other umbrella companies out there.
Access to employee discount scheme
Some umbrellas will offer “little extras” to their employees to entice them to use their service over the competition. Providing these extras are legitimate – there is nothing wrong with them. For example, have you ever heard of the employee discount scheme Perkbox? Some umbrella companies will offer membership to Perkbox of similar employee discount schemes. This could help you save money when shopping, eating out or visiting attractions. It’s a nice little bonus – if you’re into that kind of thing.
Unethical umbrella company special offers
A significant majority of umbrella companies in the UK are compliant and have contractors’ best interests at heart. However, some are actually ‘disguised remuneration schemes’ or ‘tax avoidances scheme‘, and engaging with one could land you in serious trouble. We’ve combined some of the popular “umbrella company special offers we’ve seen from non-compliant providers so that you know what ploys are out there to try and trick you.
Pay less tax
If you see an umbrella company offering you the opportunity to pay less tax – run! A tax avoidance scheme will only advertise this type offer umbrella company special offer. Engaging with a tax avoidance scheme could have devastating consequences – so never be tempted to use one.
Better than traditional umbrella
Sounds dodgy to us! Traditional umbrella companies operate PAYE to ensure contractors pay the correct tax and National Insurance Contributions to HMRC. If you’re offered the chance to retain more money than a “traditional umbrella company”, – this sounds like a tax avoidance scheme to us!
We’ve actually seen a company advertising no charges to use them. How does that work? The honest answer is we don’t know, but it sounds dodgy! The company will make money from somewhere – and if they’re hiding where – avoid them!
Compliant umbrella companies may have legitimate special offers running for new clients. Always make sure the umbrella company you’re considering is established, compliant and ethically run. A great way to check a company is compliant and has your best interests at heart is seeing whether the FCSA accredits them. The FCSA is the UK’s leading professional body dedicated to ensuring the supply chain of temporary workers is compliant and ethical.
Top 10 umbrella companies
Have you seen our top 10 umbrella companies? Some of them are running special, legitimate promotions for new clients! And, they’re all FCSA accredited! If you’re looking for an umbrella, we recommend visiting our top 10 as a starting point.