Is An Umbrella Right For Me?

If you fall into one or more of these groups, an Umbrella is most likely to be your preferred route:

I currently operate my own limited company, but due to the April 2020 IR35 reform, I've been asked to find an alternative way of being paid

When contractors can no longer use their own limited company, they often choose umbrella employment instead. It allows you to retain similar levels of freedom and flexibility but also offers you greater security and a range of employment benefits.

You work with multiple recruitment agencies

Your Umbrella should be able to pay you for all of your assignments at once, be it from one agency or ten. You get the benefit of one payment, one pay day, one tax code and one P60 and one pension provider. It simplifies your tax affairs and makes it easier to prove your income (for example, on a mortgage or visa application).

You don't want to lose the security that permanent employment gives you

Your Umbrella can pay you benefits, such as maternity and paternity pay if you've got a little one on the way, and sick pay when you're under the weather.

You'd like expert advice and support on contracting-related matters

A good Umbrella provider will be an expert on matters related to temporary workers. It's likely they'll offer to support you throughout your career, by advising on tax, pay, contracting and employment issues. For example, they should be able to answer your questions on tax codes and help you understand your rights under the Agency Workers Regulations.

You incur expenses

With an Umbrella, there are certain situations in which you may be able to claim work-related expenses. The most common are:

  • If you do any continuous professional development
  • If you work at two or more places in the same day
  • If you drive (or cycle!) to a central point to collect your assignments for the day
  • If you relocate in order to accept a new contract

Your expenses are included in the daily or hourly rate you agree with your recruitment agency for your services. No tax or National Insurance (NI) is owed on your allowable expenses, so claiming increases the portion of your pay that is free from these deductions. Effectively, the more expenses you claim, the less tax and NI you pay.