What can an umbrella company do for me

No matter what what you may call yourself, a freelancer, a contractor, or sole trader, but it's critical that your tax affairs are managed correctly. This means that you must pay the required taxes that you owe, but the challenge is establishing precisely how much you will have to pay. So you really have a couple of options, you could form a company and get an accountancy firm to complete your books of account on your behalf, or come under the shelter of what's referred to as an umbrella company. It is simpler to pay one of these companies, than to try to figure out how much you have to pay the authorities.

If you acquire your jobs via agencies, they often want you to work as a limited company, it's so they don't have to deal with your tax affairs and get involved with payments and the like. This doesn't mean that you personally should be a limited company, this is when it is possible to meet their requirements by working through an umbrella company. In case you're not already linked with an umbrella company, speak to the agency that are trying to hire you, because they normally have arrangements with the major umbrella companies. It is also an advantage to join a company they advise, since it smooths the payment process out.

If you need to locate an umbrella calculator by yourself, it's not that hard. You will notice that nearly all online job sites promote them. Each one of them boasting that they'll give you the highest percentage of your hourly or daily rate due to their fantastic accountancy system. In fact your find that they are offering identical service. The main differences among the various companies will be the fees which they take, and a few really modest services they offer. Most of these companies websites also have an umbrella calculator, helping you to work out how much you will actually be getting paid in your account after deductions.

You must remember that this umbrella calculator is only able to present you with an estimated figure, but it is a figure it is possible to compare with what another umbrella company can offer. They usually work on you having a standard tax code, and also the contract being IR 35 compliant, but they do normally subtract their fees before producing the figures. However they cannot work out how much you will save through business expenses, as that figure is not available, despite the fact that that is most companies selling feature.

For those who have already seen the figures of what you'll be banking as a limited company, you might be shocked at how low your net profit will likely be while using umbrella method. So when you see the fees that you have to pay the umbrella company, you might be amazed, but remember you will be paying an accountant a lot more. An umbrella company will be ideal for you as a contractor if you are looking for a simple life, and to make sure that you are paying the correct amount of tax, and not going to get a big surprise after self-assessment.