Deciding whether to work through an umbrella company, agency payroll or a limited company can be confusing, however finding the right option for you is not just about what you want to do but it is also dependent upon your circumstances. For instance, if you fall inside the scope of the IR35 legislation then working as an umbrella company contractor is the best solution for you.
It’s one of the most hassle free ways to work as you can be set up with an umbrella company service provider in a matter of minutes.
Umbrella companies are ideal for short term contracts or if you are new to the world of contracting.
Staying with the same umbrella company gives you continuous employment which is important when applying for mortgages.
There are no unexpected tax bills as your umbrella company makes all the necessary PAYE and NI deductions for HMRC.
PayStream's My Max umbrella service allows you to make contributions into your personal pension plan via salary sacrifice. Saving you £100s each month in both PAYE and NI contributions, whilst still preparing you for your future.
Working through an umbrella company is not as tax efficient as working through a limited company.
Some "dodgy" umbrella companies might advertise a rock-bottom margin but rack up hidden costs – such as fees for same-day payments, providing a reference or even issuing your P45 at the end of the contract.
Some "dodgy" umbrella companies may tell you that you can claim tax relief on travel to work expenses with no tax consequences. Be wary of these suggestions because in most cases working through an Umbrella Company you are likely to be acting under supervision, direction and control and as a result are unlikely to be able to claim for many, if any expenses.
Here, we explore the benefits you'll gain by working through an umbrella company, from salary sacrifice to continuous employment. Listen to why choosing an umbrella company might be the best option for you.
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Umbrella Company PayStream’s My Max umbrella |
Agency Payroll Pay As You Earn (PAYE) |
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|---|---|---|
| Continuous employment across all your assignments | ||
| Supports contributions into your personal pension through a salary sacrifice arrangement | ||
| One pension pot across all of your assignments | ||
| Employed under a contract of employment | ||
| Access to statutory sick pay | ||
| Access to statutory maternity, paternity or adoption pay | ||
| Access to comprehensive insurance package of employers liability, public liability and professional indemnity | ||
| Access to employee rewards scheme | ||
| Access to statutory bereavement leave | ||
| Access to statutory shared parental leave | ||
| Access to Online GP service at discounted price | ||
| Access to Personal Accident cover at discounted price | ||
| Allowable business expenses (if applicable) |
We’re the only place you’ll find the multi-award-winning umbrella company and accountancy service.
Our quick, easy and reliable approach to customer service is just one of the reasons why thousands of contractors rate us excellent on Trustpilot and Google.
Our comprehensive suite of services, teams of tax experts and bespoke partnerships are all on hand to support you as your career develops.
