Also known as a PAYE company, usually used by contractors, freelancers and self-employed. Seen as another option when creating a limited company, It usually acts as an employer to those working temporary jobs.
Advantages of umbrella companies:
Disadvantages of umbrella companies:
When working for an umbrella company, a middle man is made to work between you and the client. You are contracted for the period you work for them, they act as your employer. All contracts and recruitment agencies will be signed on your behalf. Your time will be recorded according to timesheets and you’ll be paid as an employee, so income tax, national insurance, pension, SLC payments and fees with be deducted.
If you’re a worker under CIS but you also worked through umbrella companies, you’ll need the P60 for each company.
You need to check with HMRC, some people working for an umbrella company may still need to do a self assessment.
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