The contracting industry has boomed massively over the last couple of decades in the UK. However, with the passing of the IR35 legislation in 2000, and last year’s changes to how it impacts public sector contractors, a lot of freelancers are now looking for umbrella companies to cushion them against the obligations of IR35. There are many umbrella companies that have come up in the recent years but even then, you still need to be very careful before you choose an umbrella company.
The following are some important tips that can help you compare umbrella companies with ease:
Fee Structure
An umbrella company will charge you a fee for the service that they are offering. Each company has a different fee structure in place. Some will charge on a weekly basis while others might do this monthly. You need to understand the fee structure in all the umbrella companies you intend to work with before finally making your decision.
Payment Frequency
The payment frequency is also an important consideration that you must make as you compare umbrella companies. It’s very simple. When your timesheet is submitted to the umbrella company, how long will it take for your payments to be processed and sent to your bank account? The sooner this happens the better it will be for you.
Track Record and History of Compliance
An umbrella company that has a good track record is absolutely necessary. How many contractors does the company have? How long has it been in operation? What has been the history of compliance with rules and regulations set? Is the customer experience good enough? These are some of the questions you need to ask to establish the pedigree and track record of the umbrella company.
Watch Out For Outrageous Claims
The competition between umbrella companies to win over contractors has always been intense. Some are now actually resorting to clever marketing ways that mean absolutely nothing. As your compare umbrella companies, pay attention to companies that call themselves “IR35 Complaint” or “HMRC approved.” This is just a clever way of getting you interested.
Extra Costs
Make sure you’ve also inquired about any possibility of extra costs beforehand. Some companies may have hidden fees such as leaving or joining fees. These fees need to be clear right from the start. However, there are still many great umbrella companies that will not charge you an extra fee. These are the companies you should be going for.
Picking the right umbrella company is very important for any contractor. The simple tips above will help you compare umbrella companies anytime and pick the best one for your needs.
