If you enjoy all of the benefits of being your own boss as a contractor or freelance worker, but sometimes despair at the amount of your time which is taken up with tiresome paperwork then it may be time to consider using a contractor umbrella company – a nifty solution that will allow you to maintain the autonomy and flexibility of self employment, while at the same time enjoying all of the benefits of becoming a company employee.

What is a Contractor Umbrella Company?

A contractor umbrella company is an organisation that can take on independent workers in most fields and help to relieve the burdens of areas such as accounting, invoices, taxing and chasing payment.

Once a contractor registers with an umbrella company they become a nominal employee of that company. While the worker continues to source and carry out work at their own convenience and according to their own schedule, the umbrella company staff will take on responsibility for areas of their business such as invoicing and accounting.

The worker need simply supply details of work completed along with client contacts to their umbrella company and the staff at the umbrella company will issue the relevant invoices and, if necessary chase payments on the workers behalf. Once the payments have been processed by umbrella company staff money earned will be taxed at the relevant level on a Pay As You Earn (PAYE) basis before the balance is forwarded to the worker.

Why Choose an Umbrella Company?

The beauty of becoming an umbrella company employee is that it removes many of the stressors of self-employment – meaning that workers need no longer responsible for keeping detailed financial records, and instead being able to entrust this important area of their operation to the professionals. Workers who use a contractor umbrella operation to process their payments need not fill out a tax return for self employment purposes at the end of the year, and can even claim back business expenses in the same way that a company employee might. Likewise, employees of a contractor umbrella company will also find it easier to qualify for statutory benefits such as sick leave and maternity pay subject to meeting the minimum earning requirements.

What Can an Umbrella Company do for You?

If your business is in an area other than finances you may find that the complicated world of accounting is one that leaves you feeling stressed and worried, as you struggle to ensure that the books are balanced and all necessary contributions are made. Becoming an employee of an umbrella company can help to take away this tension and also guarantee that you will not be hit with shocking bills that you can ill afford come tax time.

An umbrella company can also act as a buffer between you and your clients taking any possible personal conflict out of the process of payment collections – since all invoices are issued through your account manger and any necessary chasing of payment is done on your behalf – leaving you free to retain a task-focussed relationship with your clients at all times.