UK Umbrella Company
The UK Umbrella Industry has become one of the most important industries in the UK. There are hundreds of them and there are now more than 200,000 contractors who are in a UK Umbrella Company. Many moons ago, i.e. the early noughties, IT Contractors and maybe the UK umbrella companies themselves, thought that Umbrella Companies were a temporary phenomenon. They sprung up after IR35 and enabled contractors probably caught by IR35 to claim some expenses. It was thought that the Government would abolish Umbrella Companies when they got round to it as they would obviously want contractors to pay IR35 tax and not be able to claim expenses. However, the opposite has happened. Several years ago, a top brolly owner told me that the Government would much rather deal with, and legislate for, a few hundred brollies rather than hundreds of thousands of contractors,operating through Limited Companies, separately.
It made sense. It was worth losing a bit on expenses, for HMRC, to be able to deal just with those UK umbrella companies. Chasing individual contractors is hard work and costly when they could just come to an arrangement with a UK umbrella company which has thousands of contractors in it. So, it doesn’t looks as if HMRC and the Government want to do away with them at all. In fact it is Personal Service Companies that they would prefer to keep contractors out of and they would love to see them all in brollies. This must come as a big relief to the industry. It looks as if they have a long-term future which didn’t look as if was the case when UK Umbrella Companies first started up. It looks as if the Government want contractors to take that rout.
For a selection of good Umbrella Companies check out Which Umbrella Company