Top Umbrella Company Tips
It’s worth taking these top umbrella company tips if you are inside IR35.
So, here are 10 questions you should ask when joining an umbrella company.
1. How much do the fees cost?
The fees vary greatly. However, they offer different things. If you are paying a low fee then you might only be getting a basic service. You may just want a basic service or you may want all the extras such as indemnity insurance. So, see what extras you are getting with the various options and what they are worth.
2. Are there any penalties if I quit the company?
When picking umbrella companies, find out if there are any penalties that you have to pay if you leave the umbrella company. Some have penalty clauses inserted. It’s a major alarm bell if they have.
3. How regularly I get paid?
There are usually three methods:-
1. Monthly
2. Weekly
3. On production of timesheet.
Choose which one is best for you.
4. How quickly will they pay me?
Some Umbrella Companies will pay you, minus deductions, as soon as they receive the timesheet or the next day. Others, however, will only pay when they receive the money from the client. That could be a while and could ne intermittent.
5. Do they have any Indemnity Insurance included?
There are several types of Indemnity insurance. When picking Umbrella Companies, therefore, ask the Umbrella Company if they have any included in the package. Others won’t have it in but will try to sell it to you after you sign up.
6. How big a company are they?
Find out how big a company they are based on numbers of contractors and turnover. You would prefer one of the bigger ones with lots of contractors.
7. What amount of time have they been going
When picking an Umbrella Company, the longer they have been going, the safer they are, usually.
Some umbrella companies go back to, or almost as far as, the IR35 legislation was put in place. Others may have sprung up recently.
8. Find out something about the owners
Most will have come through the Accountancy route. Others come from an IT background. So, you should judge which you feel safest with. There are others from neither background.
When picking umbrella companies it is a worthwhile question to ask.
9. What expenses can you claim?
There are some, fairly standard, expenses that umbrella company contractors can offset against tax. You can check here:-
Contractor Expenses – How Much Can I Claim?
If they are offering more than this then they are flirting with danger.
10. What tax will I have to pay?
When picking umbrella companies, ask them how much tax you will be paying and compare it to other umbrella companies. There are those contractors who are in Umbrella Companeis becasue they are caught by IR35.
There are others who want to concentrate on their contracting career and want the admin done for them.
You may have been forced to join an umbrella company by your agency (although this is illegal).
Make sure you have all the facts, and have taken these top umbrella company tips, before joining an umbrella company.
Whichever it is, you should have all the facts and figures before you.
If you want to find out more from a company that ticks off all the boxes above just fill in the form below and they will be in touch.
