In today’s world, contracting has never been more prevalent. The profession has seen a rise over the years, resulting in umbrella companies also rise dramatically, providing contractors with a wide range of employment providers available to them.
With Evolve CS Group being an umbrella contracting company, we’re better positioned than most to understand how selecting the right company is crucial. If you choose the wrong company it could lose you money or even risk the wrath of HMRC. Therefore we have put together some tips on what to look out for when choosing an umbrella company.
Reputation and Experience
Like anything in this day and age it is best to go online and research the company you’re looking at, reputation is very important. You will want to check their reviews online and make sure to check on numerous platforms to ensure legitimacy and consistency in the reviews. Look out for a trustworthy provider who has the experience and a good track record of supporting contractors. Also do not forget to look on contractor forums for recommendations from other contractors and of course if you have any friends who are contractors, word of mouth is one of the most reliable sources.
A fully compliant umbrella company should provide contractors with an overarching contract of employment. This contract will give you access to the benefits associated with permanent workers, this includes sick pay, holiday pay, and maternity/paternity pay. If the umbrella company is not offering this kind of contract, there is a good chance you will be missing out on these crucial employment benefits.
An overarching contract of employment essentially means you would be employed by them and they should act as a genuine employer.
Watch Out for Rates and Hidden Fees
When it comes to your pay rates, the only thing that tends to separate each umbrella company from the next is their margin. Income tax and National Insurance are set by the government so this will not have any effect on your pay.
However, you will need to get clarification on what exactly you get for your money with the respective umbrella companies you’re looking at. Some try to lure you in with a super cheap headline figure, although this tends to result in a sub-par service which could also cause you more problems than it’s worth.
Lastly look out for joining on fees, termination fees or minimum length of term served at the umbrella company before you can leave without risking an early exit fee. Ultimately ask questions and make sure you have all the information before rushing into anything.
Payment and Expenses Policies
When choosing an umbrella company you will want to check out the umbrella company’s payment processing system. Any umbrella company worth their salt tend to run several payrolls every day, this way you can always get paid promptly.
Compliant providers will help advise you to keep hold of your receipts and advise you on what is allowable and disallowable expenses. Some other providers may encourage you to put through all sorts of claims which are not valid to make it look like they are helping you keep more money, this could land you in hot water with HMRC though, and is definitely not worth the risk.
What you can and can’t claim will be dependent on the type of assignment you’re working on and whether it’s subject to supervision, direction, or control (SDC).
The last thing you want after a hard day’s work is your umbrella company making you jump through various hoops just to get paid. You want an umbrella company that is well run and has a simple to use online portal where you can submit your timesheets and expense claims. That way it doesn’t take up more of your time and you can focus on your work.
In a lot of cases contracting work is not your standard 9-5 office hours, therefore you want to make sure your umbrella company isn’t open exclusively between these hours so if you need to get hold of them you can.
Preferred Supplier List
The majority of recruitment companies tend to operate preferred supplier lists (PSL), these lists consist of different providers the agency trusts to look after its contractors. When researching umbrella companies it is good practice to check if your provider operates PSL and choose the provider from these lists.
Now you have some insightful tips on what to look for, you’re ready to go searching for an umbrella company to get you earning some money.