What is Umbrella Company?
The process of working under an Umbrella Company is different than contracting through a Limited Company.
To understand the differences, please read the information provided below.
An Umbrella Company is a company that acts as an employer for contractors working on fixed-term contracts. They act as an intermediary between the contractor and their end client or agency. Its primal function is to organise payment for the contractor. To do this they collect the contractor’s earnings from the end client or agency and then pay it onto the contractor after deducting Tax and National Insurance Contributions.
The Sign Up process
When you sign up with an umbrella company, you will go through the following process:
First Step: Choose an Umbrella company
Choose a reputable firm with Professional Passport or FCSA Accreditation. Remember that these are the people between you and your pay-check, so choose a reputable and reliable umbrella company should be your major concern.
Second Step: Contract preparation and signing
1. With Umbrella company and your agency/client: They both will agree to their terms of business by signing a mutual contract.
Once the above step is complete Umbrella company will verify your documents and IDs and will get into a contract with you
2. With Contractor and the Umbrella company: You will get into an Employment Contractor with the Umbrella company, making you an employee of the the umbrella company.
It is their responsibility to ensure all agreements are binding and legitimate.
Third Step: Submit your Timesheet and Expenses
Fifth Step: Voila! There's your salary
Enjoy spending, but don’t forget to save 🙂 !!
You can contact our financial advisor for advice on saving.