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There are a few different ways that you can join the flexible-working sector, it’s just a case of working out the best method for you, whether that’s via an umbrella, limited company or as a sole trader.

Who should use an umbrella company?

For most people, the umbrella company route is the most appealing out of all of them, especially for those who have just left permanent employment and want to work flexibly without the hassle.

It’s ideal for those who want more flexibility with a better work-life balance, but don’t want to deal with the admin headache that comes with being a limited company contractor or sole trader.

How can umbrella companies benefit contractors?

As mentioned, increased flexibility, a better work-life balance and not having to worry about the administrative side of things are great reasons as to why you should use an umbrella company – here are a few more benefits:

Higher rates of pay

Being self-employed means that you have the freedom to pick and choose the contracts you want to take on and decide when you want to work, as well as this, contractors will often be paid a higher daily/weekly/monthly rate compared to those working as a permanent employee.

For more information on how you’ll get paid, you can read our Using an Umbrella Company – Who Pays Me? Page.

Entitled to employee benefits

As an umbrella company contractor, you are seen as the umbrella company’s employee, meaning that you’ll have standard employee benefits.

So, unlike sole traders and limited company directors, you are entitled to statutory maternity/paternity and sick pay, as well as annual leave, which will be calculated based on the hours you work.

Not having to worry about IR35

IR35 is a legislation that impacts the amount of tax and NICs you pay and whether you are able to claim back on expenses. You either fall ‘inside’ or ‘outside’ of the legislation with the defining factors based on your level of risk, liability and responsibility as a worker.

It’s a legislation that is often criticised due to its complexity and how difficult it can be to determine a contractor’s status.

However, as an umbrella company contractor this is thankfully something that you don’t need to worry about due to you being treated the same as a permanent employee.

If you want to read more about IR35, visit our page IR35 and Umbrella Company Contractors.

Is an umbrella company necessary?

An umbrella company is essentially the middle man between the contractor and their client; the umbrella employs a temporary worker on behalf of an employment agency and the agency will then provide the services of the worker to their clients.

This most certainly makes it a necessity for those who want self-employment benefits with a bit more security and less hassle; it’s also a great solution for those working on short-term contracts.

Hopefully this page has answered some of your questions regarding umbrella company employment – if you have any more queries contact our team of experts on 01206 591 000 or email

Why Choose Contractor Umbrella?

Contractor Umbrella is the hassle-free, straight talking umbrella company that provides umbrella employment for UK based contractors and freelancers. Independently voted as the best umbrella company by the readers of Contractor UK.

As one of the most trusted umbrella companies in the UK, we guarantee our employees peace of mind, absolute compliance and complete security. We are one of the longest standing and most respected umbrella companies in the UK.

If you’d like to find out more, call us on 01206 591 000 or request a call back by completing our online form.

Benefits of working through Contractor Umbrella;

  • Fast and easy registration –  be ready to work in 24 hours, simply register online and we’ll take care of the rest.
  • Calculate your take home pay – use our online calculator to find out how much you could be taking home through Contractor Umbrella.
  • Same day payments – We offer same day payments as standard providing funds are received into our account by 9am, for no additional fee.
  • Our Service Guarantee – is our guarantee that you will be looked after at every step of the way.
  • Flexible Limited Company accountancy – when you sign up to our sister company Dolan Accountancy, you can transfer to Contractor Umbrella when umbrella employment better suits or your assignment sits inside IR35.
  • Employee Benefits at Contractor Umbrella there are many benefits available to you as our employee including Childcare Vouchers, our Employee Rewards Scheme, Group Pension Scheme, Foreign Currency Exchange, Contractor Accommodation, Contractor Mortgages and much more.
  • Expert Contractor Support Team – Every employee of Contractor Umbrella has access to our expert Contractor Support Team who are available to deal with any queries that you may have. You can get in touch with the Contractor Support Team, through the online chat, by email or by telephone.
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