An umbrella company is a PAYE payroll administration company that acts as the employer for contractors who work on an assignment basis. The umbrella company deals with all the administration regarding your payment.
This includes invoicing the client and/or agency for payment and calculating the relevant tax and National Insurance contributions of the contractor. The contractor will be paid in weekly or monthly instalments as agreed with their umbrella company & Agency/Client. All the contractor must do is submit their timesheets to the umbrella company on time.
The umbrella company takes care of all the legal requirements of an employer. As an employee of an umbrella company, you are entitled to Statutory Sick Pay, Statutory Maternity Pay, Holiday Pay and a State Pension.
The umbrella company acts as the employer, providing a continuous work history which is great for mortgage and loan applications, as well as providing references.
Learn about the benefits of an umbrella company here...