Off-payroll contractors are under scrutiny. With new legislation kicking in, more independent businesses are being pulled under the lense for a closer look. The laws are there to ensure those who are being employed by companies have practices that go along with who they say they are, instead of using their limited company status to avoid paying tax.
However, a payroll service can take away a lot of the pressure, and there is a reason why so many contractors are turning to umbrella payroll.
5 Benefits
- Expertise
If you are new to business, an umbrella payroll service will have all you need to know to follow good practice when trading. Your tax is deducted before your final take-home pay so the ease of knowing your taxes are taken care of are well worth it. When people go freelance for the first time it is easy to overlook things like paying into a pension or paying yourself holiday pay. These sorts of things can easily be worked into your monthly wage using an umbrella payroll. It also means legislation like IR35 can be avoided, which can more often than not catch people out in paying up 25% of their income in tax.
- Simplicity
Signing up to an umbrella company has never been easier. The most up-to-date interface is used. The apps make accessing payslips and other information very easy with only having to spend 15 minutes a week on admin sending in your timesheets. Banking this data as you go along makes for a systematic approach that you will be thankful for later. It brings all the information into one place that can easily be viewed. Umbrella payroll from People Group Services is an example of how quick it can be to sign up.
- Employee rights
As a contractor, you are working on many fairly short-term projects. Working under an umbrella company allows you to be viewed as an employee and receive the same benefits you would get if you were working in a company. You can claim back business expenses, by submitting your receipts for equipment or travel. Simply log these as you go along and the payroll service will take care of the rest. One of the biggest neglects of contractors when managing their finances is not giving themselves statutory sick pay. This means when a day or week comes up in which illness cannot be avoided you lose out on pay. But with an umbrella payroll, you can access this just like your run-of-the-mill employees.
- Insurances
With many umbrella payroll services you are entitled to Public Liability Insurance, Employers’ Liability Insurance and Professional Indemnity Insurance.
- Flexibility
Once you are signed up to an umbrella payroll it doesn’t mean forever. If you are yet to take the plunge to be a limited company and want to try out self-employment as a contractor then the umbrella payroll is a perfect way to try this out. When you feel like it is time to move on, simply close your account.
