Umbrella Company Benefits

With the private sector’s IR35 changes now in force, large swathes of PSC and limited company contractors are migrating to umbrella companies. For many, this will be the first time they’ve ever used an umbrella company, and may therefore be unaware of the ample umbrella company benefits available to them.

With umbrella company employees deemed outside IR35 – unlike many of their PSC counterparts – switching may seem like the only option. The ‘lesser of two evils’. To some, terms like ‘employer’ and ‘timesheet submissions’ can make umbrella company employment seem somewhat restrictive. Particularly if you’ve owned and run your own successful business. So, to offer some perspective, it’s important to consider the umbrella company benefits you’ll gain by switching.

This guide will talk you through the plentiful plus points of umbrella company employment. We want to show you that contracting through an umbrella company is a choice worth making; the very best of both worlds rather than a last resort. So, here is a selection of top umbrella company benefits…

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Statutory Employment Rights

As soon as you join an umbrella company, they should make you aware of your statutory rights. This includes things like holiday pay, sick pay, and maternity or paternity pay. As a contractor, it’s important to have the peace of mind that statutory support is available as and when your circumstances change.

Continuity of Employment

By working through an umbrella company, you’ll gain the security of continuous employment, without relinquishing the freedom and control of delivering services to multiple clients and businesses. It’s ‘your business, backed by us’.

So, if you have several contracts in the pipeline, with an umbrella company you’ll always be able to rely on an overarching contract with a single employer. This is particularly useful when accessing financial products, such as credit and mortgages, at more attractive rates. Not to mention remaining in employment between assignments.

Hassle-Free Payments

Operating through an umbrella company is the stress-free solution to contracting. All payments are completed via PAYE. So, Income Tax, National Insurance contributions (NICs), and other statutory deductions are dealt with prior to each payment. You don’t need to file self-assessment returns or open any new business bank accounts. And, there’s no need to concern yourself with admin, invoices or payment chasing either.

You’ll retain the freedom to perform multiple assignments per week/month. Earnings are consolidated, and you’ll have the peace of mind that your tax is paid appropriately. All you have to do is ensure that your timesheets and expenses are correct and up-to-date. Your umbrella company will take care of everything else. They’ll deal with accountants, payroll administrators, and HMRC, while you focus on doing what you do best. Find out more, here.

Insurance & Protection

Whether you choose to switch to an umbrella company or continue contracting through your PSC, you’re going to need insurance. Some umbrella companies provide certain types of cover to enable you to perform your duties. For instance, with Danbro, you’re covered by our Public and Employers’ Liability insurance, as well as our Professional Indemnity insurance.

Pension Scheme Enrolment

As an umbrella company contractor, you are eligible for a workplace pension if you earn more than £10,000 per annum; are aged between 22 and the current State Pension age; and are not already enrolled on another workplace pension. You should receive information about your umbrella company’s workplace pension within six weeks of signing up.

What’s more, there can also be certain tax advantages to contributing to a workplace pension scheme as an umbrella company contractor. You can find out more about workplace pensions for umbrella company contractors, as well as our very own ‘Danbro One scheme’, here.

Professional HR Support

As with more ‘traditional’ types of employment, umbrella company employees should have access to a professional HR department. HR teams provide professional, impartial support and guidance in times of turbulence. Specialist support can range from things like notice pay disputes to unfair dismissal. With Danbro, all our contractors have access to our award-winning HR department and dedicated customer care team.

Private Healthcare

Depending on your provider – and service plan – you may be entitled to additional umbrella company benefits, such as private medical care. With Danbro, you can add BUPA’s medical cash plan to your solution. This includes substantial cover for optical and dental check-ups, as well as prescriptions, consultations, and a host of private treatments, from chiropody to osteopathy. Find out more, here.

Please be aware that private medical insurance is not a contractual right. Danbro reserves the right to terminate participation in the scheme, to substitute for another scheme, or alter the benefits available to you under any such scheme. You can only become a member of this scheme if you’re aged 18 and over, and are a UK resident.

Outside IR35

Perhaps the most pertinent umbrella company benefit for many is the impact on IR35 status. IR35 is the legislation that targets those who falsely position themselves as sole traders or limited company contractors – rather than employees – to avoid paying Tax and NICs. Unlike some limited company directors and PSC contractors, IR35 does not apply to umbrella company employees. Hence, why many contractors are now deciding to take the step into umbrella employment.

Career Advice & Support

As your employer, your umbrella company has your best interests at heart. They’re on hand to help in any way they can. For instance, if you’re looking for work – or are between contracts – your umbrella company may be able to assist.

At Danbro, we work with a national network of recruitment agencies, across a range of sectors. So, if you go five weeks without pay, for example, we’ll contact you to see if there’s anything we can do. And, if you finish a contract without having another one lined up, you can get in touch with your personal payroll team. Good communication is key.

Register Now for Exclusive Umbrella Company Benefits

Whether you build fighter jets, maintain railways, or provide specialist software solutions – if you don’t want the formality and pressure of incorporation, operating through an umbrella company may be the best way forward for you.

Registration with Danbro is swift, simple and stress-free – we’ll get you set up straight away. Online registration takes between five and ten minutes. Upload your ID, complete a few short details, and you’re good to go.

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