Friday, January 31, 2014

Umbrella Companies: A Tax Guide

Every penny counts in this day and age, and getting the most out of your earnings as a contractor is now more important than ever. Joining an umbrella rather than an agency payroll can offer a number of benefits and help you save money in the long run.

Tax efficiency.

Administrative assistance in dealing with taxation issues can save a lot worry for the contractor. An Umbrella Company can give you the assistance you need, leaving you free to pursue your professional talents, and help to avoid some late nights too.

Joining an umbrella payroll can also help you make the most out of reclaiming on-the-job expenses which may be difficult or even impossible if you are engaged as an agency employee instead.

As contractor accountants Umbrella Companies can make sure that you are meeting all the right tax obligations and will arrange for tax contributions to be taken out of your pay and handed straight over to HMRC.

Moving on to an umbrella payroll can give you the benefits of acting as part of a limited company without the responsibilities, administration costs or extra hassle. As specialist contractor accountants Umbrella companies can also help you to deal with smoothing out any problems with IR35 legislation.

If you choose to operate under an umbrella you will still need to pay income tax, Employee and Employers National Insurance contributions, under the PAYE system. However your Umbrella Company should be able to help you get tax relief on some of your expenses and legally save money on your taxes in the long run.

There are other benefits of working for an Umbrella Company too, such as holiday, maternity, paternity and sick pay based on your rate of earning, helping you to deal with both the planned and the unexpected. However, you will not always qualify for these payments, so you should check with the company of your choice.

To join an Umbrella Company you will usually have to pay a small regular fee through periods of work. Costs will very from company to company.

Working as a contractor can be very rewarding, giving you more autonomy to choose when you work and who you work for, as well as offering more flexible working hours. An Umbrella Company can give you the assistance and support that you need to help you through some of the more difficult issues of self-employment and allow you to focus on what you do best as a contractor.

No comments:

Post a Comment