SG Umbrella’s essential tips for new Umbrella Company Contractors

If you’re brand new to contracting or just switching over to an Umbrella Company for the length of your contract, you may be unfamiliar with how it all works.

This blog is specifically tailored to first-time users of Umbrella Companies, and provides valuable tips to help you get as much out of the experience as possible.

Understand your take-home pay

When considering potential Umbrella Companies, request an explanation of your take-home pay. This should clearly outline your tax obligations, National Insurance Contributions (NICs), pension contributions, umbrella company fees, and any other deductions.  Not all Umbrella Companies charge the same for their services, and whilst we don’t charge an extra fee for paying into your preferred private pension, some umbrellas do. By comparing the services offered and costs, you can determine which umbrella company provides the best value.

Understand how an umbrella company operates

Upon joining an Umbrella Company, you essentially become an “employee” of that umbrella, meaning they will manage your PAYE (Pay As You Earn) obligations on your behalf, deducting the necessary taxes, NICs, and other requirements from your salary. They also make sure everything is paid to HMRC correctly. The PAYE system is the same under an Umbrella Company as it is under permanent employment.

Under your contract, the agency or end-client will pay your Umbrella Company, which will deduct the appropriate amounts and provide you with your net salary. Depending on your umbrella’s payment scheduling this could be weekly or monthly.

Seek advice from a specialist accountant

Certain Umbrella Companies provide only the basic services such as handling your PAYE and paying you at the end of the month. If you want to get the most out of your contracting career, it would be beneficial to have access to a specialist contractor accountant.

Not all umbrellas offer this level of expert advice, so ensure you find an Umbrella Company that will be able to give you the proper support, such as SG Umbrella.

Expert IR35 advice, whenever you need it

Since the April 2021 reform, IR35 regulations have become more prominent and impactful. Many contractors require a service that aligns with their contract’s needs and offers, and has the ability to provide both Limited Company and Umbrella services should you ever need them.

Here at SG Umbrella our sister company SG Accounting, provides accounting services to contractors wishing to contract through their Limited Company, which is useful if your contract is found to be ‘outside IR35’. Both companies are run by expert specialist contractor accountants who are able to advise you on which option is best for you based on your personal and professional circumstances, and can introduce you to the other should your circumstances change. Keeping it all under one roof means there’s no confusion over your accounts, no timely delays in having your information passed over, and you’ll be in good hands with the same accounting team taking care of you.

Get the value you need from the fee you pay, without additional costs

Evaluate the services offered by potential Umbrella Companies and determine whether their monthly service fee justifies the value they will provide you.

At SG, we include the following:

• Full employment rights, including holiday, sickness, maternity, and paternity pay
• Annual wealth review
• A dedicated contractor accountant
• Prompt and accurate payments
• Full compliance and FCSA accreditation
• Ability to contribute as much as you want to your preferred pension plan at no extra cost

Finding the right fit for you

It’s always best to do your own research to find the Umbrella Company that suits your needs best, but a fantastic place to start is with SG Umbrella. Give our team a call for a chat through your circumstances and how we’re able to support you. Why not take a look through our 5* google reviews to see what our clients are saying about us, we’re sure you won’t be disappointed! We look forward to helping you get started on your contracting journey.