Traditionally, Umbrella has been the most popular payroll model chosen by agencies and contractors alike.
However, since the change to legislation back in April 2016 this model may not be the most appropriate for everyone. This change in legislation means contractors can no longer claim tax relief on travel and sustenance expenses. Workers that can prove they are undertaking multisite engagements where they are incurring costs travelling between working locations would be better suited to our Flip Consultants Ltd model.
We assume all contractors on the Umbrella model are caught by the IR35 and are under supervision, direction or control.
The key benefits of the Hybrid Multisite model are:
Fast and easy registration
Fully compliant with all government legislation
Free online portal to manage your account
Guaranteed Friday payments before 11am
Tax & National Insurance contributions paid at source
Full employment status
Statutory benefits including holiday, sick, maternity & paternity
The umbrella company (also known as PAYE umbrella) acts as an intermediary between the contractor and the recruitment agency (or the end client).
The payroll is handled by umbrella companies through PAYE - which deduct relevant taxes, national insurance contributions, and pensions before
paying the contractor. Umbrella companies have become more common in the UK, especially leading up to the government’s implementation of IR35 legislation.
It is extremely crucial to choose an umbrella company that is compliant with tax obligations. Non-compliance could land you in serious trouble with the HMRC in the UK.
According to research by the UK government,
the most common sectors working through umbrella companies are temporary employment agencies, consultancies, and business support services.