5 THINGS YOU SHOULD KNOW ABOUT UMBRELLA WORKING
Oct 24, 2019
As one of the UK’s longest-established Umbrella companies, our service has evolved over the years to provide everything you need to make this a straight-forward and hassle-free way to work.
Whether you’re new to Umbrella or a seasoned pro, here’s a quick reminder of some of the things you should bear in mind when working this way.
#1. You are protected with employee insurance
An Umbrella company, like any good employer, should provide public liability and employers’ liability insurance. This protects you and your family, should you have an accident or injury at work. With Umbrella from Crest Plus , we provide public liability and employers’ liability cover up to £10m, but we also provide additional insurances as we believe it’s the right thing to do for anyone who works for us. Anyone who joins our Umbrella company is automatically provided with personal accident insurance as standard. Plus, we provide professional indemnity cover up to £5m.
#2. Umbrella is better than being a sole trader/agency PAYE if you want employee benefits
When you join an Umbrella company, you are entitled to the same protections and benefits that you would have if you were employed by any other business. This means you can access all statutory payments such as paternity/maternity/adoption leave and sick pay. You can also accrue holiday pay to cover time off. Plus, you are able to prepare for your future by joining the company pension scheme. When you work on a self-employed basis, or join your recruitment agency and get paid via PAYE, you do not have these employment rights. Read more about Umbrella vs Agency PAYE.
#3. All Umbrella companies have to take the same statutory deductions
A compliant Umbrella company is the same as any other employer in that deductions such as tax and National Insurance must be made before payment is passed on to you. Sometimes confusion arises because contractors are quoted one rate by their recruitment agency and another by the Umbrella company. The Umbrella contract rate is usually higher than the Agency PAYE rate to reflect the additional costs of employment (such as Employers’ National Insurance).
Whilst an Umbrella company must also take a margin to cover the costs of providing its services, ultimately, your take-home pay should not differ significantly between the two. What’s important to note, however, is that Umbrella employment gives you statutory employment benefits, whilst agency PAYE does not.
You can find out more about how we calculate your pay.
#4. You can easily switch between assignments and work with multiple recruitment agencies
If you are fulfilling multiple contracts and working with more than one recruitment agency, it can be difficult to track and monitor your timesheets and payments. An Umbrella company takes this hassle away by paying you for all your assignments in one go. This makes it straight-forward to get paid, and far easier to make sure you’re paying the correct tax and National Insurance.
Another important thing to bear in mind is that with Umbrella you can switch between assignments but retain a record of continuous employment. This is particularly helpful when seeking mortgages or any other type of loan.
#5. You may still need to do a self-assessment tax return
Whilst an Umbrella company will ensure you pay the correct amount of income tax and National Insurance, as well as other statutory contributions which may be relevant to you (such as the Apprenticeship Levy or Child Support Allowance), you may still need to do a self-assessment tax return each year. This will depend upon your personal circumstances, but will apply to you if you have income from other sources, such as a rental property.
If you have any queries or questions about Umbrella working, please get in touch with a member of our team. We are one of the UK’s longest-established Umbrella companies and work with thousands of contractors and hundreds of recruitment agencies, providing FCSA accredited, compliant services.