It’s a tough market for job seekers, and continued reports of a lack of job opportunities coupled with rising layoffs can make the future look bleak.
Working as a contractor or temp is one way to help beat the depression of the recession by taking your job prospects into your own hands. However, there is no denying that it can be overwhelming, especially when it comes to sorting out your finances and paperwork. An umbrella company can provide you with payroll and employment services, acting as a contract accountant and assuming some of the administrative obligations that you would otherwise be responsible for as a sole trader or self-employed person.
When you join a general payroll, you become a flexible employee, making you eligible for benefits like paternity / maternity pay and vacation pay as well. At the same time, you will be able to retain some of the great benefits of working as a contractor, such as greater autonomy over where and when you work, as well as developing your own brand and offering your own unique service.
Bringing together a group of contractors under a single employment umbrella, joining a general payroll can give you some of the benefits of a limited partnership without all the hassle.
As accounting contractors, umbrella companies can be invaluable. Entering a general payroll can increase the tax efficiency of your earnings, allowing you to get a tax break on some expenses and lower your costs in the long run. This is a benefit that you would not find if you were added to the payroll of an agency.
An umbrella company will deduct taxes directly from your payment and ensure that it goes directly to HMRC and allows you to avoid the implications of IR35 or MSC legislation.
You will have to pay a fee to enjoy the benefits of joining an umbrella company, usually a small amount per week during work periods. The amount of this fee will depend on the umbrella company you choose to operate with, with a wide range of providers available.
It has proven to be a difficult start to the decade for employment opportunities, but as employers downsize permanent staff, it can become a window of opportunity for contractors, as the demand for temporary services can increase rapidly. Working as a contractor can give you peace of mind that redundancy is not on the cards, operating alongside an umbrella company could be an unbeatable combination.