Umbrella Companies

Possibly the simplest and most compliant way of managing your contract is by using an Umbrella company.

The Umbrella invoices your agency according to your timesheet and pays you under PAYE after treating as tax allowable your legitimate business expenses as advised by you on your expense claim.

The result is that you are likely to keep a greater percentage of your gross income. However, there are certain criteria that have to be satisfied in order to claim expenses as tax allowable and one of the most important is your employment status.

In order to get the best value from your Umbrella company, you need to qualify as a site-based worker. Once you have satisfied these criteria you may treat as tax allowable your daily travel and subsistence expenses which will be taken into account in the calculation of your net pay.

The use of an Umbrella solution ensures that your income tax and NI is deducted from your pay and paid over to HMRC and that you will not end up with a liability at the end of the tax year related to your pay via the Umbrella. It also ensures that you retain the maximum take-home pay.