Suppose you've decided that contracting through an umbrella company is the best option for you this new year. In that case, the next step is to find the best provider for your contracting needs.
After all, there are a lot of factors to consider when choosing the best umbrella company, meaning it isn't a decision that should be taken lightly. Moreover, every contractor is different and requires different things from their chosen umbrella provider, so research is essential to find the perfect fit.
That's where Umbrella Search comes in handy. This guide explains everything contractors need to know about choosing the best umbrella company in 2023, so you can get the new year off to a great start.
Check service level
A key consideration when choosing an umbrella company is the range and level of services the company offers.
It's important to note that every umbrella company will offer a basic service level.
Firstly, the umbrella company will employ the contractor, putting the contractor onto their payroll. This means that the contractor will pay tax through the pay-as-you-earn (PAYE) tax system, the most common way to pay tax in the UK. The PAYE system ensures that contractors are always up to date with their tax affairs, paying what they owe as they earn.
As the umbrella company takes the contractor on as their employee, they also provide the contractor with statutory benefits. This includes sick pay, holiday pay, maternity/paternity pay, and a workplace pension. This is great news for contractors meaning they can rest assured that they have a safety net should they not be able to work on the contract at hand for any of these reasons.
Another basic service that the umbrella company will provide the contractor is taking on the role of intermediary between the contractor and client. This saves the contractor precious time and energy by taking on tasks such as invoicing the client, chasing any late payments, and sorting out necessary admin and paperwork.
Finally, an umbrella company will also ensure that the contractor has the correct levels of insurance for the contract they are working on. After all, contractors are legally required to have professional indemnity and public liability insurance coverage.
This is what you can expect from an umbrella company as a minimum. However, some umbrella companies will offer additional services, meaning contractors that require extras will need to look for a company that can provide the same services they require.
For example, some contractors require things like same-day or next-day payments. Others will want help and advice on childcare tax credits. Whatever you need, choose an umbrella company that can provide it.
Check how you will get paid.
Another factor contractors should consider when choosing an umbrella company is how it will pay them.
After all, contractors work hard for their money and want to ensure that the umbrella company they choose makes getting paid easy.
To make the best decision, contractors must check how many times a week the umbrella company makes a payment run. The company should do this several times a week, meaning the contractor will get paid quickly once their timesheet has been submitted.
It's also essential to look for factors that will slow payments down. For example, suppose the company requires you to input a paper timesheet or requires specific approvals before invoices are paid. In that case, these factors can delay getting paid.
Finally, suppose you are a contractor that prefers same-day or next-day payments. In that case, you must check if your chosen umbrella company can offer this service.
Look at umbrella company fees
Another thing to look out for when choosing the best umbrella company is how much they charge in fees.
Contractors want to avoid paying over the odds for the umbrella company. However, there are better options than the cheapest. That's why it's essential to check what an umbrella company charges in fees and whether hidden costs exist.
Thankfully, umbrella company fees are highly competitive, meaning contractors can expect to pay around £20 upwards per week. However, it is worth considering that you can expect to pay extra if you require additional services and benefits.
Some umbrella companies will also charge additional fees for things such as signing up with the company, leaving the company, filing expenses, and undertaking specific paperwork, so it's always a good idea to read the fine print, so you don't face unexpected costs.
Check the umbrella company's reputation
Finally, checking that the umbrella company has a good reputation is essential. Although the majority of umbrella companies are trustworthy, as in any industry, there is a small handful that isn't.
To do so, contractors will need to carry out a background check. This can be as simple as carrying out an internet search and checking out the Freelancer and Contractor Services Association, proving that they adhere to strict policies, meet high standards, and ensure they are HMRC compliant.
Now you know what to look out for when choosing an umbrella company that's just right for your contracting needs in 2023, Umbrella Search is here to help with the next steps.
Let Umbrella Search help you find the best umbrella company this new year
At Umbrella Search, our team of friendly professionals is on hand to help you find the best umbrella company for your contracting needs in 2023.
Whatever you're looking for from an umbrella company, we will work hard to find a provider you know you can trust that works well for you.
We will work closely with you to understand your circumstances and requirements before conducting the research and due diligence to provide a list of the best companies. Get in touch to learn more and take the first steps to find your perfect match.