![]() It is the ideal working structure for those looking to apply for a mortgage, loans, phone contracts, or any other product or service which requires credit checks. While also being able to work across multiple contract assignments. TRUE: When a contractor joins an umbrella company, they are then an employee of that company, allowing them to receive the same benefits permanent workers receive. “You’re not self-employed when you join an umbrella company” It is better to get paid less but getting paid on time and correctly over the employer who causes all sorts of hassle, pays incorrectly, and lands you in hot water with HMRC. ![]() To give another analogy on this subject, if you receive two job offers for work you’re most likely to go and work for the company with a stellar reputation and known for being a more secure and reliable employer over the one with a higher salary but questionable business practices. “You get to keep almost all of your pay with an umbrella company”įALSE: If an umbrella company is claiming you will take a very high amount of take-home pay, it is likely that they are not operating compliantly and is too good to be true. “Umbrella companies will rip you off”įALSE: If the umbrella company is legitimate they will not rip you off, they make their money by deducting a nominal weekly or monthly margin (roughly around £25 per week or £100 per month), although it can vary proportionately to the worker’s earnings as naturally if their worker is on a low wage it wouldn’t be fair to hold them to the same margins as someone who is earning twice as much. Other accreditations to keep an eye out for are Professional Passport and The Association of Professional Staffing Companies (APSCo). They should be members of the Freelancer and Contractor Services Association (FCSA), they also thoroughly audit their members before they are allowed to join to ensure their practices are legitimate. It is worth contractors researching umbrella companies before they choose, it is worth checking if they are regulated too. Also, umbrella companies will deal with deductions (tax and national insurance, allowing contractors to focus on their work. The legitimate umbrella companies provide a legal employment structure for contractors, allowing them to benefit from the same rewards of permanent employee status. “Umbrella companies are scam artists”įALSE: Like any industry, there are inevitably scam artists or rip-off merchants, but to tar, every umbrella company with the same brush is unfair and unfounded as there are plenty of established and reputable umbrella companies who operate in an ethical manner. ![]() They tended to offer amazing deals which were as expected, too good to be true. However, there was a surge in non-compliant umbrella companies post-IR35 reforms in 2017. Umbrella companies offer a more stable source of income for contractors, especially when working on multiple projects. “Umbrellas are set up to capitalise on IR35”įALSE: Umbrella companies have been around for over 20 years, therefore this claim umbrella companies have been set up to capitalise on IR35 is inaccurate. This post aims to clarify the most common misconceptions surrounding umbrella companies, giving you a true or false verdict on each. In large this is due to numerous non-compliant and unregulated companies entering the market off the back of the updated IR35 legislation. This has brought about a lot of common misconceptions around umbrella company’s service offerings. The umbrella company structure allows contractors a way of getting paid under continuous employment.
0 Comments
Leave a Reply. |