Is Umbrella my best choice?

Latest News

Concern and uncertainty are rife among contractors who are worried about how the IR35 legislation will affect their working practices.

IR35 was introduced into the public sector in 2017 and is set to expand into the private sector from April, meaning many limited company contractors that have been considered ‘outside’ IR35 will be assessed as being ‘inside’.

The responsibility for determining the employment status of a worker will switch to the contractor’s end client from April, and if a determination is made that someone is ‘inside’ the fee payer becomes responsible for deducting the tax and National Insurance contributions and paying these to HMRC.

The administrative burden of carrying out assessments and the fear of getting them wrong has led to end clients applying blanket bans on the use of limited company contractors in recent months.

Whilst there are a huge number of contractors who are genuinely independent, they are currently facing the struggle to prove this fact to the Revenue.

Working through an Umbrella Company

Debate on this subject rages on, but those individuals not wanting to be forced into permanent roles need not worry, as Umbrella Companies like Rubicon Pay mean this doesn’t have to be the case.

When you use an umbrella company as a contractor, you sign a contract of employment and become that umbrella company’s employee. The IR35 legislation therefore doesn’t apply because there is no question of ‘disguised employment’.

You will then be able to work on multiple long- or short-term assignments, exactly as you did through your limited company, with the additional benefits of being an employee – statutory sick, maternity and paternity pay, as well as comprehensive professional indemnity, employers’ and public liability insurance.

Rubicon Pay will also ensure that relevant AWR checks are undertaken to ensure that those who complete a 12-week qualifying period in the same role will be entitled to the same terms and conditions as their end client’s permanent employees. These checks will make certain that your rate has been uplifted to cover the employer’s costs an umbrella company has to pay, such as Employer’s NI, so that you take home at least the same amount as a permanent worker in the same role.

The day-to-day process of working through an umbrella company is very straightforward –

– You submit timesheets to your umbrella company, usually weekly or monthly, outlining the amount of days or hours you have worked on your given rate.

– Your umbrella company will invoice your agency or end client for a gross amount based on the information on the timesheet.

– Your umbrella company will pay you directly into your bank account, after making all the necessary employer and employee deductions, including tax, National Insurance and a margin to cover their operational costs.

Why use Rubicon Pay?

Rubicon Pay’s team of expert relationship managers work with new and experienced contractors across a range of industries to offer a hassle-free umbrella service that is efficient, competitive and 100% compliant. Contact their friendly team of experts today:

Call: 01379 438028

Email: [email protected]

Opening times: Monday – Thursday 9am – 5.30pm. Friday 9am – 5pm

Previous Post
Rubicon Pay secures Professional Passport accreditation
Next Post
Employment groups say IR35 will harm contractors and businesses

Related Posts

No results found.

Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.