Why use an umbrella company?
Following HMRC’s recent crackdown and focus on tax avoidance, many more businesses are now using an umbrella company as an employment solution for their contractors.
As a result, HMRC has produced guidelines on working through an umbrella company.
Compliant umbrella companies will operate a transparent payroll process using the PAYE scheme.
The PAYE scheme satisfies HMRC’s requirements for the correct treatment of employment income for taxation; it also means that you do not need to worry about whether you will incur future tax bills due to mismanagement.
iConsult specialises in employment and payroll and is committed to providing the best solution and service for each of your individual needs.
Will I get the same benefits as a normal employee?
A contractor working for an umbrella company has the same rights and benefits as a full-time employee. As a compliant umbrella company, iConsult provides you with holiday, sickness, maternity and paternity pay as standard, including all other statutory employment rights.
Can I claim expenses whilst using an umbrella company?
In some cases, you may be able to get a tax break on the costs of your work assignments.
Your ability to claim expenses will depend on whether you are under the supervision, direction or control of a client representative for whom you are working.
iConsult will advise you on whether you can get tax deductions on expenses before you start your contract.
If you can claim expenses, any claim you make must have proof that you have incurred it. You may not always be asked to provide receipts, but a compliant organisation will conduct spot checks in line with their commitments to HMRC and always ask you to verify that you have retained the proof of purchase.
HMRC is placing great emphasis on tackling tax avoidance and could therefore conduct an audit at any time.
At iConsult, safety first is always our priority.
Is an umbrella company inside IR35?
No, if you work on a contract via an umbrella company, the IR35 legislation will not apply to you. IR35 only applies to contractors providing services through their own limited company (also known as a PSC).