SG Umbrella’s top tips for new Umbrella Company contractors

Whether you’re completely new to contracting or if you’re moving over to an Umbrella for the duration of your contract, it’ll be a new experience.

This blog is for those who are using an Umbrella Company for the first time, and offers some top tips on how to make the most from your time with them.

Understand how much you’ll be taking home

Ask prospective Umbrella Companies for an illustration of your take home pay, clearly displaying how much you’ll be paying in tax, National Insurance Contributions (NICs), your pension contributions, their fees, and any other deductions. Along with a list of the services they’re able to provide you, you’ll be able to see which umbrella will offer you the best service for the best price.

Know how an Umbrella Company works

When you join an Umbrella Company you’ll effectively become an ‘employee’ of that umbrella. This means that they’ll manage your PAYE on your behalf, deducting the necessary tax, NICs and other requirements from your salary, and ensuring it’s correctly paid to HMRC. PAYE is the system used when you’re in permanent employment, and works in the same way when using an Umbrella Company.

The agency or end-client who provided you the contract will pay your Umbrella Company, who will deduct the necessary amounts, then pay you your net salary. This is either weekly or monthly, depending on your umbrella’s payment scheduling.

Get the advice you need from a specialist accountant

Some Umbrella Companies only offer a basic service, running your PAYE and paying you at the end of the month, with little to no added advice or support. If you’re serious about your contracting career and making your money work as hard as it possibly can, then you’ll want to have access to a specialist contractor accountant.

Not every umbrella provides this level of expert support, so be sure to understand who will be providing you with the support and advice you’ll need.

IR35 advice and support, whenever you need it

IR35 has never be more prominent, or had such an important role than since the April 2021 reform. Many contractors need a service that compliments their contract’s needs and can offer a service which always them to switch freely between umbrella and limited business models depending on the contract.

Here at SG we offer just that, with the ability to switch between our umbrella services when your contract is ‘inside’ IR35, and use SG Accounting with your Limited Company (if you have one – we can set one up for your if you don’t) when you’re contract is ‘outside’. We also provide IR35 contract reviews, support challenging a client’s status determination and offer advice on how to favour an outside determination. For more information take a look at our blog on switching from SG umbrella to limited, and back again.

Extra services without the extra costs

Take a look at the services your prospective umbrella offers, and whether their monthly service fee justifies what they’re offering.

Here at SG we include:

• Full employment rights including holiday, sickness, maternity and paternity pay
• Annual wealth review
• the ability to switch between SG Umbrella and SG Accounting whenever needed, and keep your Limited Company open
• A dedicated contractor accountant
• Super-fast and accurate payments
• Fully compliant – FCSA accredited
• Pay as much as you want into your preferred pension

For more information on how SG Umbrella can help you, get in touch with one of the SG team today.