How to choose an Umbrella Company

Back Office Support

Having made the decision to start contracting and really make a go of it as a career, you'll need what all contractors rely on - back office support. Specifically, you'll need two things:

• 'Limited company' status
• A payment mechanism

If, like most contractors, you have looked into and discounted the option of setting up and running your own limited company, you will be on the hunt for an umbrella company. It's pretty much universally agreed that the umbrella company service is the best way to trade for most contractors - and certainly the best choice for people new to contracting.

If you're still unsure what umbrella companies do you should read this article about how an umbrella company can assist any contractor with their administration & paperwork.

Hard Copy or Online?

There are hundreds of umbrella company services open for business at the moment and they all offer slightly different packages from each other.

At one end of the scale would be an umbrella company service which is wholly online (meaning you'll never have to speak to anybody from the umbrella company), and at the other end of the scale is an umbrella company which is wholly off-line (meaning all matters are dealt with either over the phone or by traditional postal means).

• In between these two extremes are umbrella companies which have the means to be contacted by email/web portal/telephone/post. Check out the Top 100 UK Umbrella Company Chart to see which umbrella companies are doing well.

You'll have to decide which way you'd prefer to interact with your umbrella company on a weekly or monthly basis. Consider how your day will pan out and how much time you'll have to deal with your umbrella company.

Ten Questions to ask an Umbrella Company

1. How much do they charge? And are there any extra charges?
2. How many clients on their books?
3. Can you claim business expenses? Do you need receipts?
4. Are insurances included in the price? What are they and for how much?
5. How quickly will you be paid after sending over your timesheet?
6. Will you have your own account manager?
7. Is there a formal complaints procedure?
8. What are their opening hours? Does this suit you, if you need to call them?
9. Can you leave them at any time without having to pay a penalty?
10. What happens to your account when your contract ends?

You can find answers to many of these questions by trawling through the websites of each umbrella company, or you can ask a friend or you can check out the independent reviews of each umbrella company at Contractor Supermarket.