Tips to Choose a Right Umbrella Company
Umbrella Company works as a vehicle for managing all of the admin traditionally associated with contracting, leaving individual contractors to concentrate on the contracts themselves. An umbrella company will take on invoicing, collecting payments from clients and / or agencies, organizing national insurance contributions and calculating tax as well as passing on money to the contractor’s bank account.
Here are some tips which you should check before picking your Umbrella Company.
1. Are they compliant?
With so many umbrella companies popping up everywhere it’s important to make sure the one you choose is professionally audited and operating compliantly. Many contractors aren’t aware that, if the Inland Revenue chooses to investigate your paying the correct tax, it’s YOU they investigate and not your umbrella company. Of course any Umbrella Company Services will advise you that they are compliant and it it’s difficult to tell otherwise.
2. Un-receipted expense claims
I would advise to steer clear of umbrella companies that promise to pay expenses without receipts. At the end of the day all umbrella companies operate under the same laws & legislations decided by HM Revenue & Customs, therefore they must all abide by the same rules. In the event of an investigation, these expenses would be disallowed, leaving you liable for the tax being owed and not your umbrella company.
3. Entry & Exit fees
Stay clear of umbrella companies that have entry, exit or minimum term commitments/penalty fees. A good umbrella company will maintain your customer loyalty by providing the best service and looking after their clients; these are the ones that won’t need entry/exit fees.
4. Pick an established reputable umbrella company
In such a competitive industry, umbrella companies pop up and go into administration all the time, they will take your money with them, leaving you out of pocket. By picking an established umbrella company, based on reviews from colleagues and testimonials by clients, you will be able to be confident the support you receive from your Umbrella Service won’t leave you high and dry if the worst comes to worst. Umbrella company should be approved by government then you trust on that.
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