What is an Umbrella Company?
Over recent years, it has been witnessed that people are looking out for freedom and flexibility at work, which has led to an increase in demand of Umbrella Companies to achieve this. More and more questions are being asked about using these umbrella companies.
What is an umbrella company? How do I find the right Umbrella Company? Are Umbrella companies safe to use? At Ovations, we are dedicated to solving your queries regarding Umbrella Companies. In this post, we will be explaining all about umbrella companies:
What do umbrella companies do?
The question of how umbrella companies work and what they do is very common. An Umbrella Company is a company that acts as an employer for contractors working on fixed-term contracts. Everything is taken care of by their employer; the umbrella company.
The Umbrella Company acts 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 to the contractor after deducting Tax and National Insurance Contributions.
How do umbrella companies work?
When joining an umbrella company, it is important to understand the Umbrella Company’s process to pay you. The umbrella process is simple,
- Becoming an umbrella employee – The contractor is employed by the umbrella company.
- Calculating hours – The contractor sends a signed timesheet to the agency, and an expenses form to the umbrella company.
- Receiving funds – The umbrella company then receives funds and payment details from the contractor’s agency.
- Deductions – The umbrella company then calculates and deducts their fees, PAYE and National Insurance from the funds received.
- Voila! The Umbrella company will then pay the contractor’s net wage.
Why choose an umbrella company?
You may be wondering whether or not an umbrella company is right for you. An umbrella company is a simple solution for contractors working in between contracts and also allows you to have legal employee status.
Working through an umbrella company also comes with all the benefits of being employed, you can find all of the details about umbrella employee benefits here. So you still have flexibility and freedom at work whilst receiving benefits.
Working through an umbrella company is hassle-free, giving you time to focus on what you do best. The sign-up process is easy, with little paperwork you, can sign up in minutes! You can learn more about our sign up process here.
Why Ovations Umbrella?
When it comes to choosing an Umbrella company, it is crucial to pick the right one. Ovations Umbrella is a trusted umbrella service with professional passport accreditation. Being an accredited firm means that Ovations Umbrella’s processes, contracts and policies are regularly and independently audited by industry experts, ensuring that we are a fit and proper business. You can be assured you’re in safe hands!
We hope this helps! You can find out more about our benefits here. If you have any more questions our team of experts are always available to advise you on your payroll, HMRC guidelines, IR35, or AWR regulations. Get a quick quote now.