PAYE Umbrella Companies
PAYE Umbrella Companies are the safest way to operate as a contractor. If you are part of one of them you can sleep safely in your bed at night. There will no knock on the door from the taxman. There will be no HMRC enquiry. Indeed there will be hardly any admin at all. The Company does all the work for you. Whilst operating as a contractor, and getting paid contractor rates, you get looked after like a permanent employee. There is no VAT to do. There is no end-of-year tax return to do. You don’t even have to invoice the client. The Companies do it all for you. They do all your admin.
Indeed all the contractor has to do is input his or her timesheets and expenses. The PAYE Umbrella Company does the rest. There needs to be no other imput from the contractor till the money hits his or her bank account. All they have to do is spend it. Contractors are effectively employees of the Companies. They are no longer ‘disguised employees’ but real employees of the Companies. That’s while getting paid contractor rates.
Of course you will have to pay more of your income in tax and NICs than a Limited Company contractor. However, you have less hassle. You don’t have to worry about the knock on the door. Most importantly for some, you don’t have any admin to do. The great majority of the PAYE Umbrella Companies are as safe as houses. Choose one of those who have been around for a while and who don’t come up with any wild schemes for netting you expenses. It’s better to be safe than sorry.
For a selection of good Umbrella Companies check out Which Umbrella Company