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Umbrella Company

An umbrella company is a company that acts as an employer to Agency contractors who work under a fixed term contract assignment.

How do they work?

Using an umbrella company essentially means that you as ‘the contractor’ become an employee of the umbrella company. As part of the process you submit timesheets to the Dutton Recruitment, we will in turn invoice the end client for the work that you have carried out. You are then paid by the umbrella company as a PAYE employee - less the umbrella fee.

What are the benefits to you?

Umbrella companies carry many advantages for contractors including:

  • They are easy to use. Contractors using umbrella companies simply submit their time sheets and expense claims through Dutton Recruitment who send the information to the umbrella company and wait to be paid.
  • All tax and NI is calculated and deducted by the umbrella company prior to you receiving your money. This means you do not need to worry about calculating your tax
  • Umbrella companies are suitable for those contractors who have both long and short-term contracts who want minimal input.
  • Umbrella companies offer suitable solutions for contractors at all salary rates.
  • They offer the perfect solution for those who are unsure about contracting or are simply contracting as an ‘in between’ job as there is minimum input required.
  • Aside from the timesheets and expenses claims there is very little other paperwork to be completed.
  • Other benefits such as insurance may be carried in the service such as insurance & training.
  • As an employee of an umbrella company you are also usually be able to claim basic expenses, this is  based on you being able to provide valid original receipts.

Which Umbrella Company is right for you?

When you are looking for an Umbrella Company there are a number of things that you should bear in mind: Essentially, Umbrella Companies are all governed by the Inland Revenue. This means that your earnings with one cannot be any higher than they would be with another; the only variance should be the fees that the Umbrella Company charges. A reputable Umbrella Company should not charge you according to what you earn. There is no more work involved, for the Umbrella Company, if you earn £50 per day or £500 per day. If you are quoted a percentage of your earnings as a fee you should ensure, through careful calculation that you will still be paying a reasonable amount – average fees are between £15 and £25 per week.

When working through Dutton Recruitment it is in our best interest to ensure that you are happy and well paid in the position and Client to which we supply you. A big part of this satisfaction is knowing that you will be getting paid appropriately, therefore it is imperative that our Consultants are educated to the degree that they can provide you with the most up-to-date information on working through an Umbrella Company. For this reason we discuss all umbrella companies that may be suitable to you.

As an Employment Business it is illegal for us to force you to go through one particular Umbrella Provider, our role is simply to assist. As a Company though, it is essential that we allow you only to go through a provider which stands up to our strict financial guidelines which, in the long-term safeguard you and your money. Therefore we hold a list of “Approved Umbrella Providers” which most reputable Umbrella Companies will be on. Going through an Umbrella Company that isn’t financially tested can mean that potentially you could be left with a large Tax debt or left out of pocket if the Umbrella Company experiences any financial difficulty.

How do you sign up to an Umbrella Company?

We will assist you in providing and filling out application forms for your chosen Umbrella Company. Typically we will send out forms with your contract. We have a tried and trusted Umbrella partner that we will Payroll you through as a default meaning that before working for us it isn’t necessary that you are already signed up with an Umbrella Group. This is part of the service we are proud to provide for you.