There has always been a significant proportion of the population that have favoured contracting as opposed to a permanent employment position. It is fair to say that this proportion has increased over the past few years. There are lots of reasons why this is the case. Nonetheless, if you are a contractor or you are considering moving into this type of work, you definitely need to consider the prospect of hiring an umbrella company. This will make your life a lot easier and ensure that everything is handled above board. Essentially, an umbrella company will technically employ you. As a result, you will submit your timesheet and they will handle all of your paperwork, invoices, and taxes for you. Of course this is something you could do yourself, but why is it better to use an umbrella company instead?
One of the main benefits associated with going down this route is that you can be one hundred per cent certain everything is handled in line with the law. This can be a lot easier said than done. After all, there is a wealth of regulations in place for contractors and freelancers, and these are changing all of the time. They can be extremely difficult to understand, especially when you take all of the confusing legal terms into account. Nonetheless, if you do not abide by these laws, you can find yourself in big trouble. Luckily, if you use an umbrella company you don’t have anything to worry about, as they will handle all of this for you.
In addition to this, the ease and convenience associated with this option should not be underestimated. The only thing you need to worry about is constructing and submitting your timesheet, which you can do with an electronic workflow solution. This is great for working efficiently. This eliminates an enormous amount of paperwork. And let’s be frank, who likes paperwork? Moreover, this task takes a substantial amount of time – time you could be spending focusing on what makes you money. Therefore, one can safely say that using an umbrella company also enhances efficiency as well.
It is also worth considering the fact that budgeting will be made a lot easier if you use an umbrella company. If you were to handle everything yourself you would need to budget for tax every month. This can be very difficult to do, especially when most tax is paid on an annual basis. Can you really put that money aside every month and not touch it? You don’t have to worry about this with an umbrella company. They will deduct your tax and you will be left with your net profit for every month. This guarantees you don’t find yourself in a sticky situation in relation to tax.
All in all, there are many benefits associated with using umbrella companies. If you are a contractor or freelancer, or considering becoming one, you should definitely assess the various umbrella companies that are on offer in order to find the best one for you. Seek someone with a good reputation, favourable fees, and a quick turnaround time in relation to processing your profit.
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