Umbrella Quick Guide
If you are on a short contract or are earning less than £25,000 p.a. then an umbrella service may be for you. Working within an umbrella company is simpler than working through your own Limited Company but your take home pay will be lower and you won’t have the same opportunities for efficient tax planning.
How does it work?
- The umbrella company signs a contract with the your recruitment agency
- You sign an employment contract with the umbrella company
- You both submit timesheet and expenses information
- The umbrella company invoices your client/agency for the work you have done
- The umbrella will receive funds for you from the agency
- The umbrella forwards the funds you, less tax, NI contributions and the umbrella services fee. The umbrella company will send you a payslip just like a permanent employee.
Expenses
You can claim legitimate business expenses and this will reduce your tax bill. Receipts should be kept for all expenses that you claim. Be very wary of companies who say you do not need to keep receipts and you can claim for things you haven’t actually bought. The Inland Revenue will view any expenses you can’t prove as tax avoidance.
Reilly McMordie’s umbrella company offers:
- Competitive fixed fees for weekly or monthly pay
- NO entry or exit fees
- NO call centres or automated phone systems – just good service delivered by good people
If you would like further advice on umbrella services or setting up a Limited Company please call Kerry Pickersgill on 0161 968 8100 or email
Client introductions: we offer £75 for a new Limited Company and £50 for a new Umbrella
Reilly McMordie specialise in providing accountancy services for contractors throughout the UK. Established in 1985, we have extensive experience in the industry.
Next Step:
Please contact us if you need further advice, have any questions about our services, would like a free consultation or a fixed fee quote.
