Choosing the right umbrella company can prove to be a daunting task. It becomes even more difficult for someone who has never used an umbrella company for any of their previous assignments.
First-timers need to be very careful while appointing an umbrella company. It is estimated that there are over 500 umbrella companies operating in the UK.
While most umbrella companies you find would be compliant, there are some who indulge in tax avoidance schemes which pose a great threat to the temporary workforce. They mostly offer a higher take-home pay than usual and try to lure the temporary workers into appointing them.
One must avoid such umbrella companies as they eventually prove to be a professional disaster, resulting in financial penalties and legal troubles.
In this article, we will try and help you choose the right umbrella company.
The first and foremost thing one must do before appointing an umbrella company is to do complete due diligence. But, the question is how?
Well, you must search on Google about the shortlisted umbrella company. Put search strings like “xxx company complaints” or “xxx company reviews” on Google and see what comes up.
Create a post on LinkedIn asking for recommendations from fellow temporary workers. Use hashtags like #umbrellacompany #recommendation #recommended on LinkedIn while creating a post about umbrella company recommendations to widen the reach.
You can also seek recommendations on sites like Twitter and Reddit. Tweet and post wherever you can. Check forums and see if you can find any information about the umbrella company you are trying to appoint.
Once you have searched on Google and posted on Social Media, check with Recruiters you may know. Usually, Recruiters are aware of good and bad umbrella companies. But don’t just take their word for it, as some Recruiters get a referral commission from umbrella companies which may result in a bit of biased advice.
See if the umbrella company you are trying to appoint has a website. If yes, go through their website. Look up Companies House and check their company details. Find out how long they have been operating. Are there any reasons to be alarmed?
You can also ask the umbrella company you are trying to appoint for testimonials from their existing clients. Cross-check with those clients and try to find out how their experience has been with them. For how long they are associated with the umbrella company. This should greatly help in making an informed decision.
Don’t fall for their fancy words and higher take-home adverts, or maybe free gifts upon joining them. If it’s too good to be true, well then there is a possibility that it isn’t.
Review the contract with your umbrella company thoroughly. Study their fee structure and check if there are any hidden fees. See if they charge any exit fees – meaning, tomorrow if you don’t want to be associated with the umbrella company then for whatever reason, you should not be charged a fee for leaving them. That is certainly not a good practice. Read all the terms and conditions, notice period and termination clauses. Gather as much information as you can – invest some time now and not regret it later
Ensure that the tax return and P11D submission fees are included. There shouldn’t be any additional charge to receive an annual P60 from the umbrella company.
Find out how quickly you will be paid, after submitting the timesheet. Most umbrella companies are easy to set up and offer same-day payments.
Points like minimum wage, holiday and sick pay should be covered. They are all statutory.
One of the important aspects of appointing an umbrella company is a 24/7 online portal. Check with the umbrella company if they are providing a dedicated account manager, and are they charging anything extra for it?
If you follow what we have mentioned in our article, you should be good. Still, if you have any queries, please feel free to write to them.