Why an umbrella solution gives you the best of both worlds

I met with a friend recently who I hadn’t seen for few years, and of course,  we went through the whole “long time no see” chat. When I said “oh, I work for an umbrella company” she looked baffled – for a moment I think she thought I was covering metal frames with water repellent fabric!   Trying to explain the role of umbrella companies and that they are very much needed in these economic times was somewhat interesting. Who builds the country’s fighter jets? Maintains the railways? Provides specialist technologies? The list goes on.  I explained that many of these vital industries rely heavily on the temporary contractor market, and for those who don’t want the formality of incorporation, working for an employment intermediary is the way to go.


Contractors are a very important asset to the UK economy.

  Indeed, The Taylor Review recently acknowledged that the self-employed population made a significant contribution to the UK’s economic recovery after the recession.  With the Government trying to keep pace with the quickly changing face of employment in the UK, contractors, especially within the growing gig economy, need to keep the work flowing in and will no doubt need an agent.   As a freelancer or contractor you’ve a couple of options – and if running a limited company isn’t for you, then using an umbrella company can give you the benefits of employment. In some circumstances you can even claim your incurred business expenses within the HMRC rules.  

If you’re not sure how an employment umbrella works, the umbrella company acts as the employer.

  The contractor has a contract of employment and whilst you may think this all a tad serious, what it does mean is that whilst a self-employed person can’t claim holiday pay or statutory pay, an umbrella contractor can claim, all due to their defined employment status.  Alongside this, all payments are dealt with through the PAYE system, so Income Tax, National Insurance and other statutory deductions are made directly on each payment.  Your NI contributions are Class 1, so should the need arise in the future, income based benefits are being contributed to and so too your state pension.  On the pension theme, you also have access to an auto-enrolment workplace pension as an employee.   Short term assignments are not something just to fill in a gap between ‘proper’ jobs; it is for many a preferred choice whilst maintaining the longevity of a permanent role.  It means you can mix and match your assignments to meet your personal career ambitions, your family commitments, and maybe your dream holiday.   A myth of working on a temporary assignment is that you receive less favourable remuneration or paid time off.  As a contractor you can actually choose to either bank your holiday pay or have it paid to you within each payment.  The Agency Worker Regulations stipulate that workers have to be paid equivalent payment for the same job, and uplifts in a contractor’s pay allow for holiday pay to be paid by either method alongside other considerations – more flexibility for you.

There are all the benefits of being in a permanent role whilst being able to choose short term assignments – the best of both worlds. Who could say no to an opportunity like that?

If you’d like to find out more about our Employment Umbrella, call us on 0800 731 3178.

Blog written by
Sam Wright
Marketing Manager at

Sam Wright is Danbro’s Marketing Manager. He produces regular content and feature articles on our digital and non-digital channels – and social platforms – for the Danbro Group and its subsidiaries, as well as having responsibility for the Company’s internal and external communications.

His background is in Journalism and Creative Writing, having previously contributed to publications such as The Daily Post, The Lancashire Evening Post, and The Blackpool Gazette.

He is a keen swimmer and avid Manchester United fan (but don’t hold that against him), and he lives in Lancashire with his wife, Sarah.

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