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Umbrella Company Services For Contractors
Contractors must, in most cases, work via a Limited Company which is very cost efficient on a long term basis. However if the contractor is working for a short term, the cost of establishing and winding down can be high in relation to earnings over a 3 to 6 month period. To combat this, we offer umbrella company services. The contractor becomes an employee of Birchland Consultants Limited and works on PAYE. Birchland Consultants Limited enters into the contract with the agency. This means no set up or winding down costs, a substantial saving in both time & money. A major disadvantage for the contractor is that all earnings are subject to national insurance contributions and thus we would not recommend this course of action over the long term unless the contractor's rate of pay is below a certain threshold or they have limited travel expenses.
Our charge for this service is 5% of your gross contract rate if you want us to pay you monthly, or 7.5% if you would prefer weekly pay. As we are also obliged to pay Employers National Insurance to the DSS, this means that we remit to you a total of 84.66% of the money we receive from your agency (net of VAT) for monthly salary to you and 82.44% for weekly salary. Your normal employee tax and national insurance are then deducted in calculating your net pay, which is then credited by us directly into your bank account.
Notes-
  1. Working Time regulations introduced by the government on 1st October 1998 mean that as your employer, we are obliged to provide you with paid holiday of four weeks per year. In order to do this, we deduct a further 8.4% of your contract rate during your contract and pay this to you as holiday pay at the end of your contract, or if you have built up adequate holiday pay reserves during a longer contract, you may take the paid holiday during your contract.
  2. We operate a BACS payment system to make salary payments directly into your bank account. This is done each Thursday for weekly paid contractors and on the last Thursday in the month for those who select the monthly option.. The payment is based on any money credited and cleared in our bank account by 3pm the day before (i.e. Wednesday) and your salary will be credited by your bank into your account on the following Monday or Tuesday, depending on which bank you use.
Advantages of Umbrella Company Services
  • No Company formation or share holdings to consider or charges to establish and close a company.
  • We provide a contract of employment and only need your P45 and identification for you to be ready to start.
  • No need to register for VAT or account for VAT. We organise this for you.
  • No registration for corporation tax or advance corporation tax or accounts or returns to prepare.
  • No invoicing. You provide us with the timesheets, we organise invoicing and collection and pay you by PAYE
  • Your net pay is credited directly to your bank account by us and we provide you with the payslips
  • When your contract is finished we provide a P45 which you simply give to your new employer.
What Happens if You Continue Contracting in The Long Term?
Many Contractors start contracting under an umbrella company and then stay in contracting, forming their own Limited Company.
If you have used our umbrella service for three months or more and then decide to do this, Birchland Consultants Limited will establish you Company free of charge if you retain our services for accountancy.
How To Use Our Umbrella Services
Either telephone us, or ask your agency to contact us and we'll organise everything for you from there.
Tel: 07000 785045
For Your Nearest Office
or
Registered Office:336 Holdenhurst Road, Bournemouth, Dorset BH8 8BE
|LTD Company Formation|
|Tax Mitigation|
|Accountancy Services|
|Umbrella Company Services|
|FAQ|
|Company Profile|