If you are new to contract working, you may be considering how an umbrella company can help you to run your business and save you valuable time.
There are benefits to working as a contract worker under an umbrella company set up which will give you the support that you need as well as save you time to be able to do the things that are important when running your own contractor business. The other way of working is of course to establish your own limited company and operate via that business which also comes with its benefits so both need to be considered carefully.
Most contractors when starting out as a freelance worker or when leaving the safety and security of full-time employment will consider umbrella company services initially to reduce the risks of setting up a new limited company.
Some people will work under an umbrella company to begin with for a period of time and then will generally consider switching to setting up their own Limited Company. You should speak to a specialist umbrella company accountant in the first instance to find out more and see which route is the best one for you based on your own needs or expectations.
Advantages of using an Umbrella Company
In the early days of working as a contractor and leaving the security of full-time employment, it can be a lot to take in so you may just want to have someone there in the background to help guide you. An umbrella company will give you the support you need by providing you with:
Employment law
An umbrella company will fundamentally mean that you are still treated as an employee from a legal and payroll perspective which means that you still have the same rights as an employee. You will also be paid via the umbrella company so you do not have to worry about any potential payroll issues or tax implications.
Earning potential
Most freelance and contract workers move to this way of working to increase income and to be able to dictate their own working patterns, compared to full time working.
Reduced administrative duties
Most company directors will automatically be responsible for completing a number of administrative tasks as part of their standard directorial duties. It can be a drain on time and resources which is why an umbrella company can help you to remove this from your workloads.
No credit control issues
It can be extremely frustrating as a business owner to have to chase payments for unpaid invoices which can be extremely stressful and annoying. Working under an umbrella company means that your credit control should be taken care of by your umbrella company as they are responsible for chasing payments. This therefore means that you should be paid more quickly, accurately and on time.
Employment rights and insurances
Under an umbrella company, you should have a package of services which will mean that all of your business and public indemnity insurances are covered by the umbrella company. Insurance can be an extremely costly part of running your own business as well as the amount of time that it takes to search the market for insurance providers. You should also be aware that working as part of an umbrella company will mean that you have the same rights as any other employee so you will be entitled to the same benefits from an employment law perspective.
If you need more help or advice on operating through an Umbrella Company, speak to one of our Gorilla Accounting team of experts. We offer a full range of umbrella services as well as supporting limited companies so speak to us to find out how we can help you to run your business more effectively and efficiently.
