For young professionals, starting out on a freelance career can at first seem very daunting and confusing. Not only is there the worry of finding work and ensuring you have enough of it to guarantee a reasonable salary at the end of the month, there is also the financial and accounting work, which many first time freelancers are less than prepared for.
Umbrella companies are ideal solutions for taking away some of the stress and work involved in freelancing, regardless of whether you are a beginner or have been freelancing for years. An umbrella company is essentially an employer to agency contractors; it processes payroll services for the contractor and bills the agency. This company structure has been around in the UK for some time, however, it was only after the introduction of the IR35 (a tax regulation which affects people who work on a non-permanent basis), that they really took off.
Recruitment agencies use umbrella companies because they reduce the amount of payroll administration work they have. Freelancers and contractors generally use them for both the employment benefits as well as financial benefits. As a freelancer working with an umbrella company, you become an employee of the company and have all the statutory rights just like any other employee. These include the right to sickness pay, maternity pay, paternity pay as etc.
In addition to these statutory benefits, umbrella companies also provide insurances as well as pensions and offer contractors the opportunity to claim back business and travel expenses. These benefits therefore offer workers more financial security than they would have working on their own.
Although people working under umbrella companies are technically not self-employed because they are paid as a PAYE employee, they are still responsible for finding their own work. It's therefore essential that you still remain proactive in this regard, and it's especially important that you maintain and develop good relationships with clients and potential customers.
The umbrella company also considerably reduces the time and effort you would spend looking for and working with accountants or other financial advisors, as it does virtually all this work for you. Many contractors enjoy this added security of not simply working on their own.
Today many professional umbrella companies are members of associations such as AEMC or SPA and all should have an HMRC approved employment contract. If you want the freedom or working as a freelancer, but perhaps don't have the confidence to go it alone just yet, then contact an umbrella company for more details on what it can do to help you.
Umbrella companies are ideal solutions for taking away some of the stress and work involved in freelancing, regardless of whether you are a beginner or have been freelancing for years. An umbrella company is essentially an employer to agency contractors; it processes payroll services for the contractor and bills the agency. This company structure has been around in the UK for some time, however, it was only after the introduction of the IR35 (a tax regulation which affects people who work on a non-permanent basis), that they really took off.
Recruitment agencies use umbrella companies because they reduce the amount of payroll administration work they have. Freelancers and contractors generally use them for both the employment benefits as well as financial benefits. As a freelancer working with an umbrella company, you become an employee of the company and have all the statutory rights just like any other employee. These include the right to sickness pay, maternity pay, paternity pay as etc.
In addition to these statutory benefits, umbrella companies also provide insurances as well as pensions and offer contractors the opportunity to claim back business and travel expenses. These benefits therefore offer workers more financial security than they would have working on their own.
Although people working under umbrella companies are technically not self-employed because they are paid as a PAYE employee, they are still responsible for finding their own work. It's therefore essential that you still remain proactive in this regard, and it's especially important that you maintain and develop good relationships with clients and potential customers.
The umbrella company also considerably reduces the time and effort you would spend looking for and working with accountants or other financial advisors, as it does virtually all this work for you. Many contractors enjoy this added security of not simply working on their own.
Today many professional umbrella companies are members of associations such as AEMC or SPA and all should have an HMRC approved employment contract. If you want the freedom or working as a freelancer, but perhaps don't have the confidence to go it alone just yet, then contact an umbrella company for more details on what it can do to help you.
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