What Is Continuity Of Employment And How Does It Apply To Umbrella Companies?

What is continuity of employment and how does it apply to umbrella companies?

One of the most significant benefits of using an umbrella company is continuity of employment. However, what is continuity of employment, and why is it advantageous for contractors, freelancers and temporary workers? Keep reading, and we’ll explain what continuity of employment is and how it can help you out.

Umbrella companies have multiple benefits

There are several reasons why umbrella companies are a popular payroll solution for temporary workers in the UK. Not only is registering with an umbrella company easy, but it’s also commonly known as the easiest method for contractors and freelancers to get paid. There are plenty of additional reasons they’re in high demand, including the overall low cost of using them, free insurance cover, Same Day Faster Payments, no tie in period, statutory employee rights, and more!

Continuity of employment is often underrated

Continuity of employment is perhaps one of the most underrated benefits of using an umbrella company. Firstly, it means temporary workers have the same employer for multiple contracts with different end clients. This makes life way easier – rather than jumping ship each time a role is taken with another organisation. After all, most umbrella company employees are workers on short-term assignments – often no longer than 12 weeks. Umbrella companies mean you can keep your payroll with the same organisation, no matter how many times you take new roles. From an administrative point of view – this can save plenty of time and stress.

It’s also possible to have multiple ongoing contracts at the same time – all with the same employer (your umbrella company). Trust us – this will make your life so much easier!

Additional benefits of continuity of employment

Continuity of employment also has other perks. Traditionally, it has been difficult for contractors, freelancers and self-employed professionals to obtain external finance. For example, it’s no secret that some temporary workers can struggle to source a mortgage with an acceptable interest rate – even though work is stable. This is one of the main reasons those who consider temporary work decide against it. With continuity of employment made available from umbrella companies, sourcing mortgages and external finance (such as bank loans) is far easier because workers have a history of one employer. One employer will also help ensure your tax code remains consistent and you’re not faced with unexpected increases in income tax and National Insurance Contributions (NICs).

Don’t believe all the negative press aimed at umbrella companies

Umbrella companies frequently face negative press due to several factors, including rogue organisations (such as mini umbrella companies) and complex contracts. However, continuity of employment is a significant factor umbrella companies have experienced high demand and why tens of thousands of workers are happy to use them. Understandably, some umbrella employees don’t like the lack of control over their finances (compared to being the director of a limited company). However, for those looking to have the most streamlined and straightforward contracting experience possible – umbrellas provide a viable solution, and continuity of employment should be seen as a major incentive for choosing the umbrella route.

Top 10 umbrella companies

There are over 500 umbrella companies in the UK. Therefore, there is a lot of choice! To help make your life easier, we’ve collated a list of our top 10 umbrella companies. They’re all accredited by either the Freelancer & Contractor Services Association (FCSA) or Professional Passport, and some of them have special offers at the moment.

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Click here to see our top 10 umbrella companies!

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