Choosing an umbrella company

As you are probably aware, there are a number of umbrella company services to choose from, but you have to be careful to work with a company that you trust. The last several months have seen more than a few umbrella companies fold overnight, and the workers are the ones who end up losing out - and losing their take home pay.

To help protect all of our clients against this, FPS use a unique ’Honeycomb’ system; where each worker is protected in their own individual company. We are also the only Government regulated umbrella administrator, and the only company with a dedicated account to protect client monies.  These are just some of the key differences between FPS and other umbrella company administrators.

In addition, the UK Government has recently made changes to tax and employment law that will have a profound effect on contractors, freelancers and temporary workers.  It’s crucial to choose an umbrella company that can be trusted and has the necessary expertise to navigate the changing landscape.

Types of umbrella services

The most common form of umbrella arrangement is the ‘salary only’ or PAYE scheme.  All of your income is paid by salary only, and you can claim reasonable expenses. This is the way that FPS operates.

There are other types of umbrella services available to UK temporary workers, usually involving foreign currency loans and other offshore arrangements. Some might seem advantageous, but it’s important to make sure they fit in with legislation in the UK - and that they are actually appropriate for your specific needs.

For example, the UK Government has recently changed the rules for Employee Benefit Trusts. If you currently use one of these trusts, you may find your income is subject to income tax and National Insurance contributions.

Getting paid on time

Making sure that you get paid on time is, of course, one of your key concerns. Unfortunately, many umbrella company administrators can be very inflexible when it comes to the timing of payments, and do not make customer service a priority.

Before signing with an umbrella company, make sure you know how quickly they’ll send your invoices through, and how long it will take to get paid. The best ones will listen to your specific needs and be willing to work to the timelines that you set.

In addition, some umbrella companies hold back a percentage of your pay (to cover holiday pay and similar items) and will then pay these funds back to you at a later date. Make sure you understand in advance how much you will be paid, and at what times.

Agency recommendations

It is important to remember that it’s you who gets to choose which umbrella company administrator you use. Many recruitment agencies will recommend a particular company, but you are perfectly within your rights to make alternative arrangements if you want to.

Successful agencies normally make recommendations based on their own experience of working with a specific umbrella company.  Their recommendation could be reflection on the quality of service, or how much effort is required on their part.  Alternatively, they could make a recommendation for commercial reasons.

Don’t be afraid to ask your agency why they recommend a particular umbrella company, or to stick with one you know you can trust. The Personal Service Umbrella with FPS can be taken with you to any agency that you choose to work with.

Choose experience and compliance

It’s an unfortunate truth that in Britain, anybody can start an umbrella company. That is why it is so important to choose a company that has a demonstrated track record for reliability and trustworthiness.

It is wise to look for a fully regulated administrator of umbrella companies with many years experience in the industry.  You also need to be sure that you choose a company which is staffed by qualified experts, and prides itself on exceptional customer service – so that you know that any problems or queries you might have will be dealt with quickly and efficiently.