Why choose an umbrella company?

Most people will only come across an umbrella company if they are in a contract so do not worry if you are feeling a little confused. Whilst you are carrying out your research you may also come across various terms for an umbrella company such as a contract umbrella, contract umbrella company, contracting umbrella company, contractor umbrella company, IT contractor umbrella,IT umbrella company, Limited umbrella, Ltd umbrella company, umbrella companies IT, umbrella limited companies, & umbrella limited company.

Whatever the terminology, in its simplest form, an umbrella company processes a PAYE payroll for contractors whilst offsetting business expenses against their tax, without having to worry about the IR35 legislation.
An umbrella company should provide employment to a freelance contractor in much the same way as any other business that employs staff. You should be provided with a Contract of Employment under the Employment Rights Act 1996 which grants you with full employment rights and statutory protection. Your umbrella company should contract with your agency/client and should take care of all administration for you.

Your contract of employment should be drawn up on the basis that you are a permanent employee and in the expectation that you will be working for your umbrella company for a number of assignments. Your permanent workplace will normally be your home which you will use as a base to:

- complete your paperwork
- travel to and from the various temporary workplaces
- that you need to attend to undertake your assignments, search for new assignments 
As an employee you should be covered by the umbrella company's insurance cover (employer's liability, public liability and professional liability). Indeed the real advantage of an umbrella company is that it provides a safe, simple and compliant method of employment for those freelance contractors who don’t want the considerable responsibilities, administration and hassle of running their own company.

Umbrella companies have become more of a requirement since the British government introduced IR35 legislation in 1999. Umbrella companies are a hassle free way of working whilst allowing contractors to increase their take home pay compared to being paid PAYE through the recruitment agency or client.

The GUIDE UK PAYE Umbrella Company solution is designed for contractors who want the benefits and advantages of contracting but do not want the burden of running and maintaining their own ltd company

In signing up with Guide UK you have the comfort of knowing that you are working with one of the UK’s leading umbrella companies who automatically cover all the above points.
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