Should Contractors use an Umbrella Company

An umbrella company works as a back-office for freelancers and contractors who work under a contract assignment(s).

If you are a temporary worker you can substantially reduce your paperwork and administration work-load by registering for free with an umbrella company.

Once registered, you will have nothing else to do but hand your weekly/monthly timesheets into them - together with any expenses you may have run up. At that point the umbrella company takes over. You just sit back and wait for your net salary to hit your bank account a few days later.

Meanwhile, the umbrella company gets on with the administration. They:

• Invoice your agency
• Ensure your agency don't pay late
• Calculate what tax is due
• Deal with all matters concerning HMRC
• Transfer your money direct to your personal bank account

Not so long ago, you would have to have done all this work yourself. With an umbrella company you don't have to deal with VAT, income tax, NI contributions, legal issues, spreadsheets & payroll.

When you choose your umbrella company you need to take into account the level of service you require and how much you want to pay.

Contractor Supermarket is unique in offering existing contractors a means to rate their umbrella company on a number of factors, including price & service. All the scores are added together to form the Top 100 UK Umbrella Company Chart.

This means you can pick your umbrella company knowing what other contractors think about them. And if that's not enough - visit our list of Approved umbrella companies for that extra peace of mind!

If you have any questions or want to know more, simply visit either our umbrella company FAQs or our Ask an Expert section.