{"id":21167,"date":"2021-06-08T14:15:00","date_gmt":"2021-06-08T14:15:00","guid":{"rendered":"https:\/\/smh.group\/?p=21167"},"modified":"2021-06-08T14:15:00","modified_gmt":"2021-06-08T14:15:00","slug":"umbrella-companies-sorting-the-good-from-the-bad","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/","title":{"rendered":"Umbrella companies \u2013 sorting the good from the bad"},"content":{"rendered":"\n<p><strong>Contractors have turned to umbrella companies as a hassle-free way of providing their services to clients following the recent changes to the off payroll working rules. They receive no tax savings, but pass on some administration and pay less than a standalone limited company would charge. However, not all umbrella companies are equal.<\/strong><\/p>\n\n\n\n<p>The main advantage to using an umbrella company is that the off payroll working rules will not apply. All of your earnings become subject to PAYE in the hands of the umbrella company. <strong><span style=\"text-decoration: underline;\"><a href=\"http:\/\/www.gov.uk\/guidance\/working-through-an-umbrella-company\" target=\"_blank\" rel=\"noreferrer noopener\">HMRC has published a useful guide<\/a><\/span><\/strong> explaining how and what you will be paid when working through an umbrella company.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Employment<\/strong><\/h2>\n\n\n\n<p>You, as the contractor, will be an employee of the umbrella company, and the umbrella company will therefore pay you for the work carried out for clients, whether contracted directly, or via an employment agency. Gross pay is calculated after various costs, such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>the umbrella company\u2019s administration costs;<\/strong><\/li><li><strong>employer NICs;<\/strong><\/li><li><strong>workplace pension contributions; and<\/strong><\/li><li><strong>holiday pay.<\/strong><\/li><\/ul>\n\n\n\n<p>As an employee, you are entitled to 5.6 weeks of paid holiday pay a year, and the umbrella company must pay you for this if you leave with holiday entitlement accrued.<\/p>\n\n\n\n<p>However, holiday pay must normally be taken in the year it is accrued and cannot be carried forward. This is one area where an unscrupulous umbrella company can cost you, with some simply pocketing pay for unclaimed holidays.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Tax avoidance<\/strong><\/h2>\n\n\n\n<p>Most umbrella companies are compliant with tax rules, but some use tax avoidance schemes. Be wary of an umbrella company that:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Claims they can help you keep more of your earnings than others; or<\/strong><\/li><li><strong>Asks you to sign an annuity, loan or other agreement involving a non-taxable element of pay, especially if this involves a different organisation to the umbrella company.<\/strong><\/li><\/ul>\n\n\n\n<p>Moreover, avoidance schemes may come with a high, non-refundable, fee.<\/p>\n\n\n\n<p>HMRC has <strong><span style=\"text-decoration: underline;\"><a href=\"https:\/\/www.gov.uk\/guidance\/tax-avoidance-schemes-aimed-at-contractors-and-agency-workers\" target=\"_blank\" rel=\"noreferrer noopener\">published guidance<\/a><\/span><\/strong> to identifying schemes that wrongly claim to increase take-home pay. If you need further advice you can contact our <strong><span style=\"text-decoration: underline;\"><a href=\"https:\/\/devstagesite.co.uk\/smhgroup\/chartered-accountants\/\">Accounting &#038; Business Advisory<\/a><\/span><\/strong> on <strong>0114 266 4432<\/strong> or <strong><span style=\"text-decoration: underline;\"><a href=\"mailto:info@smhca.co.uk\">info@smhca.co.uk<\/a><\/span><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Contractors have turned to umbrella companies as a hassle-free way of providing their services to clients following the recent changes to the off payroll working rules. They receive no tax savings, but pass on some administration and pay less than a standalone limited company would charge. However, not all umbrella companies are equal.<\/p>\n","protected":false},"author":4,"featured_media":18041,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[3],"tags":[218,185,458,269,108,19,258,780],"class_list":["post-21167","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-smh-accounting-business-advisory","tag-employment","tag-ir35","tag-off-payroll","tag-paye","tag-payroll","tag-tax","tag-tax-avoidance","tag-umbrella-companies"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Umbrella companies \u2013 sorting the good from the bad - SMH Group Accounting &amp; Business Advisory<\/title>\n<meta name=\"description\" content=\"Contractors have turned to umbrella companies as a hassle-free way of providing their services to clients following the recent changes to the off payroll working rules. They receive no tax savings, but pass on some administration and pay less than a standalone limited company would charge. However, not all umbrella companies are equal.\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Umbrella companies \u2013 sorting the good from the bad - SMH Group Accounting &amp; Business Advisory\" \/>\n<meta property=\"og:description\" content=\"Contractors have turned to umbrella companies as a hassle-free way of providing their services to clients following the recent changes to the off payroll working rules. They receive no tax savings, but pass on some administration and pay less than a standalone limited company would charge. However, not all umbrella companies are equal.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/\" \/>\n<meta property=\"og:site_name\" content=\"SMH Group\" \/>\n<meta property=\"article:published_time\" content=\"2021-06-08T14:15:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/devstagesite.co.uk\/smhgroup\/wp-content\/uploads\/2018\/11\/Income-Protection.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1603\" \/>\n\t<meta property=\"og:image:height\" content=\"450\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Brendan Hall\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Brendan Hall\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/\"},\"author\":{\"name\":\"Brendan Hall\",\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/#\/schema\/person\/637129b7464f960037f1b676f625570e\"},\"headline\":\"Umbrella companies \u2013 sorting the good from the bad\",\"datePublished\":\"2021-06-08T14:15:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/\"},\"wordCount\":346,\"image\":{\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/devstagesite.co.uk\/smhgroup\/wp-content\/uploads\/2018\/11\/Income-Protection.jpg\",\"keywords\":[\"employment\",\"IR35\",\"off payroll\",\"PAYE\",\"payroll\",\"tax\",\"Tax avoidance\",\"umbrella companies\"],\"articleSection\":[\"SMH Accounting &amp; Business Advisory\"],\"inLanguage\":\"en-GB\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/\",\"url\":\"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/\",\"name\":\"Umbrella companies \u2013 sorting the good from the bad - SMH Group Accounting & Business Advisory\",\"isPartOf\":{\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/devstagesite.co.uk\/smhgroup\/wp-content\/uploads\/2018\/11\/Income-Protection.jpg\",\"datePublished\":\"2021-06-08T14:15:00+00:00\",\"author\":{\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/#\/schema\/person\/637129b7464f960037f1b676f625570e\"},\"description\":\"Contractors have turned to umbrella companies as a hassle-free way of providing their services to clients following the recent changes to the off payroll working rules. They receive no tax savings, but pass on some administration and pay less than a standalone limited company would charge. However, not all umbrella companies are equal.\",\"breadcrumb\":{\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/#breadcrumb\"},\"inLanguage\":\"en-GB\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-GB\",\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/#primaryimage\",\"url\":\"https:\/\/devstagesite.co.uk\/smhgroup\/wp-content\/uploads\/2018\/11\/Income-Protection.jpg\",\"contentUrl\":\"https:\/\/devstagesite.co.uk\/smhgroup\/wp-content\/uploads\/2018\/11\/Income-Protection.jpg\",\"width\":1603,\"height\":450,\"caption\":\"Protect your income\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/devstagesite.co.uk\/smhgroup\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Umbrella companies \u2013 sorting the good from the bad\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/#website\",\"url\":\"https:\/\/devstagesite.co.uk\/smhgroup\/\",\"name\":\"SMH Group\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/devstagesite.co.uk\/smhgroup\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-GB\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/#\/schema\/person\/637129b7464f960037f1b676f625570e\",\"name\":\"Brendan Hall\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-GB\",\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/fe3e3bb96786e02b14d97d1c006fde60e4080a2841fd919bafa62c4cc1c65688?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/fe3e3bb96786e02b14d97d1c006fde60e4080a2841fd919bafa62c4cc1c65688?s=96&d=mm&r=g\",\"caption\":\"Brendan Hall\"},\"url\":\"https:\/\/devstagesite.co.uk\/smhgroup\/author\/brendan-hall\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Umbrella companies \u2013 sorting the good from the bad - SMH Group Accounting & Business Advisory","description":"Contractors have turned to umbrella companies as a hassle-free way of providing their services to clients following the recent changes to the off payroll working rules. They receive no tax savings, but pass on some administration and pay less than a standalone limited company would charge. However, not all umbrella companies are equal.","robots":{"index":"noindex","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"og_locale":"en_GB","og_type":"article","og_title":"Umbrella companies \u2013 sorting the good from the bad - SMH Group Accounting & Business Advisory","og_description":"Contractors have turned to umbrella companies as a hassle-free way of providing their services to clients following the recent changes to the off payroll working rules. They receive no tax savings, but pass on some administration and pay less than a standalone limited company would charge. However, not all umbrella companies are equal.","og_url":"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/","og_site_name":"SMH Group","article_published_time":"2021-06-08T14:15:00+00:00","og_image":[{"width":1603,"height":450,"url":"https:\/\/devstagesite.co.uk\/smhgroup\/wp-content\/uploads\/2018\/11\/Income-Protection.jpg","type":"image\/jpeg"}],"author":"Brendan Hall","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Brendan Hall","Estimated reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/#article","isPartOf":{"@id":"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/"},"author":{"name":"Brendan Hall","@id":"https:\/\/devstagesite.co.uk\/smhgroup\/#\/schema\/person\/637129b7464f960037f1b676f625570e"},"headline":"Umbrella companies \u2013 sorting the good from the bad","datePublished":"2021-06-08T14:15:00+00:00","mainEntityOfPage":{"@id":"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/"},"wordCount":346,"image":{"@id":"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/#primaryimage"},"thumbnailUrl":"https:\/\/devstagesite.co.uk\/smhgroup\/wp-content\/uploads\/2018\/11\/Income-Protection.jpg","keywords":["employment","IR35","off payroll","PAYE","payroll","tax","Tax avoidance","umbrella companies"],"articleSection":["SMH Accounting &amp; Business Advisory"],"inLanguage":"en-GB"},{"@type":"WebPage","@id":"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/","url":"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/","name":"Umbrella companies \u2013 sorting the good from the bad - SMH Group Accounting & Business Advisory","isPartOf":{"@id":"https:\/\/devstagesite.co.uk\/smhgroup\/#website"},"primaryImageOfPage":{"@id":"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/#primaryimage"},"image":{"@id":"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/#primaryimage"},"thumbnailUrl":"https:\/\/devstagesite.co.uk\/smhgroup\/wp-content\/uploads\/2018\/11\/Income-Protection.jpg","datePublished":"2021-06-08T14:15:00+00:00","author":{"@id":"https:\/\/devstagesite.co.uk\/smhgroup\/#\/schema\/person\/637129b7464f960037f1b676f625570e"},"description":"Contractors have turned to umbrella companies as a hassle-free way of providing their services to clients following the recent changes to the off payroll working rules. They receive no tax savings, but pass on some administration and pay less than a standalone limited company would charge. However, not all umbrella companies are equal.","breadcrumb":{"@id":"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/#breadcrumb"},"inLanguage":"en-GB","potentialAction":[{"@type":"ReadAction","target":["https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/"]}]},{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/#primaryimage","url":"https:\/\/devstagesite.co.uk\/smhgroup\/wp-content\/uploads\/2018\/11\/Income-Protection.jpg","contentUrl":"https:\/\/devstagesite.co.uk\/smhgroup\/wp-content\/uploads\/2018\/11\/Income-Protection.jpg","width":1603,"height":450,"caption":"Protect your income"},{"@type":"BreadcrumbList","@id":"https:\/\/devstagesite.co.uk\/smhgroup\/umbrella-companies-sorting-the-good-from-the-bad\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/devstagesite.co.uk\/smhgroup\/"},{"@type":"ListItem","position":2,"name":"Umbrella companies \u2013 sorting the good from the bad"}]},{"@type":"WebSite","@id":"https:\/\/devstagesite.co.uk\/smhgroup\/#website","url":"https:\/\/devstagesite.co.uk\/smhgroup\/","name":"SMH Group","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/devstagesite.co.uk\/smhgroup\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-GB"},{"@type":"Person","@id":"https:\/\/devstagesite.co.uk\/smhgroup\/#\/schema\/person\/637129b7464f960037f1b676f625570e","name":"Brendan Hall","image":{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/devstagesite.co.uk\/smhgroup\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/fe3e3bb96786e02b14d97d1c006fde60e4080a2841fd919bafa62c4cc1c65688?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/fe3e3bb96786e02b14d97d1c006fde60e4080a2841fd919bafa62c4cc1c65688?s=96&d=mm&r=g","caption":"Brendan Hall"},"url":"https:\/\/devstagesite.co.uk\/smhgroup\/author\/brendan-hall\/"}]}},"_links":{"self":[{"href":"https:\/\/devstagesite.co.uk\/smhgroup\/wp-json\/wp\/v2\/posts\/21167","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/devstagesite.co.uk\/smhgroup\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/devstagesite.co.uk\/smhgroup\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/devstagesite.co.uk\/smhgroup\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/devstagesite.co.uk\/smhgroup\/wp-json\/wp\/v2\/comments?post=21167"}],"version-history":[{"count":0,"href":"https:\/\/devstagesite.co.uk\/smhgroup\/wp-json\/wp\/v2\/posts\/21167\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/devstagesite.co.uk\/smhgroup\/wp-json\/wp\/v2\/media\/18041"}],"wp:attachment":[{"href":"https:\/\/devstagesite.co.uk\/smhgroup\/wp-json\/wp\/v2\/media?parent=21167"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/devstagesite.co.uk\/smhgroup\/wp-json\/wp\/v2\/categories?post=21167"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/devstagesite.co.uk\/smhgroup\/wp-json\/wp\/v2\/tags?post=21167"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}