In simple words, it is a company that acts as an employer to the contractors who work under a fixed term contract assignment, usually through a recruitment employment agency. An umbrella company offers a convenient way to trade to contractors because of the presence of an all-encompassing contract that provides continuous employment to a contractor. It’s a good option if you're really just in between permanent jobs. It involves a simpler process with no or little paperwork. At Bradleys Payroll Solutions , we enable you to get paid for your contracting work on a PAYE basis. We will assume you are working under Supervision, Direction or Control, you will be paid with no tax relief and we will deduct the tax and National Insurance due against your earnings. You can claim tax relief against your expenses at the end of the financial year so you remember to keep receipts for them. This is an ideal solution for any temp worker who is doing short term contractual projects or does not want the hassle of operating a limited company.
Firstly, how much you earn as a contractor depends on how you decide to trade, either as a limited or an umbrella company. Limited company contractors take home around 75-80% of their contract value and umbrella company contractors are entitled to around 60-65% of their take home pay. The take home pay is higher through a Limited company only because contractors working through an umbrella company are seen more as employees of the umbrella company. The take home pay further varies depending on which industry you are working in, the company you work for, your skill set and most importantly what tax code you are being taxed through an umbrella company.
This payroll solution may not be highly tax efficient, but it does offer a “hassle free” way to contract. So contractors who are still testing the water or are into short-term contracts, working on a short term basis for multiple agencies or do not earn sufficient amounts to make setting up a limited company worthwhile, will find it useful. If you want to know more about our services, please feel free to get in touch with us on our Tax Helpline 0203 507 0022 or write to use on firstname.lastname@example.org.
The registration process at Bradleys Payroll Solutions is simple and can be done online or by phone. We will require the following information, preferably via email or post:
Once we receive these details, we will contact your agency or client and request the issue of your contract to Bradleys Payroll Solutions, post which we will send a copy of the contract to you for review before we sign it on your behalf. You will then receive a Contract of Employment with us, which you will need to sign and return.
It is necessary for you to record your time spent on assignments in the timesheets that are provided to you by your client or agency. The expense claims chargeable to the agency or client depend on your SDC status. It’s your responsibility to ensure that your timesheets and expense claims are approved and submitted according to the processes mentioned in your Contract of Employment. Please forward copies of all timesheets and expense claims to email@example.com . If there is a delay in the submission of copies, then a delay in payments is inevitable. We, at Bradleys Payroll Solutions, keep an accurate record of all the timesheets we receive from the contractors. For more details, give us a call on on our number 0203 507 1811 or write to us on firstname.lastname@example.org .
Yes, you have the flexibility to work on multiple contracts simultaneously at no additional cost.
No. All contractors using an umbrella company are deemed to be working within IR35 and hence, the IR35 rules don’t apply to us. You will be paid via PAYE only. You will not receive dividends in any form.