If you’re a first time contractor, then it is advisable to seek the services of an umbrella company rather than exert time and money on building a limited company. Especially if you don’t plan to stay in this set up for a long period of time.

When you use an umbrella company, you basically become an employee of the umbrella company. And as part of the process, you need to submit your timesheets to the umbrella company either on a weekly or monthly basis. They will in turn give the end client an invoice for the work that you have carried out. You are then paid by the umbrella company as a PAYE employee minus some small fees.

• The PAYE Umbrella Company provides appropriate solutions for contractors at all salary rates.

• They offer the perfect solution for contractors who are simply contracting as an in between job or is unsure yet if contracting is what they really want since there is a minimum effort required.

• It best suits contractors who have both short and long-term contracts who want minimum effort.

• For short-term contractors, the main advantage is that you don’t need to go through the costly process of forming your own limited company and then later on arranging for it to be dissolved.

• The PAYE umbrella company will be the one responsible for calculating and deducting all tax and National Insurance contribution prior to giving you the net salary. So there’s no need to worry about calculating your tax as everything is taken care off for you.

• Aside from the expense claims and timesheets, there is only very little other paperwork to be completed.

• And of course, they are very easy to use. Contractors under an umbrella company simply submit their timesheets and expenses claims to them and just wait to be paid.