Third-party umbrella companies, sometimes called ‘payroll umbrellas’, offer contractors a convenient way to remove the burden of timesheet processing, invoicing, and pay. They employ contractors directly, paying them through PAYE on behalf of the end client.
Why use an umbrella company?
Put simply, they keep arrangements clean and simple.
Many firms prefer contractors to take this approach, too, because it reduces paperwork and complexity on their side. As well as easier administration, umbrella companies offer a full range of employee rights and benefits – from sick pay to maternity leave.
For those who find themselves undertaking one short contract after another, working through an umbrella can reduce bureaucracy and paperwork.
They can also be a great way to dip your toe in the world of contracting with minimal fuss and trouble, to decide if it is the long-term career path for you.