As a freelancer or contractor working for different businesses delivering services, chances are you’ll spend a lot of your free time worrying about accounts and bookkeeping. After a busy week, the last thing you want to do is bury your head in a pile of books and think about saving money for your Self Assessment Return. Fear not; there is an alternative. Check out these tips from Evolve Contract Services, the best umbrella company in the industry…
Helps you with your budgeting
Unlike working for yourself, when you join an umbrella company, you don’t have to worry about tax and National Insurance payments at the end of the year. Your finances will be managed for you by your company, and you’ll be paid post-tax at the end of every week or month. You’ll also benefit from the fact that IR35 won’t be relevant to you – upcoming tax legislation, due to come into force this year before COVID-19, are now delayed to 2021.
Enjoy employee benefits
Another reason to consider an umbrella company is that you can be viewed as an employee as your wages will be paid via PAYE. As the COVID-19 pandemic has taught us, employees are often treated in higher regard than the self-employed. When you work with an umbrella firm, you’ll enjoy the benefits of being an employee, such as sick pay, maternity pay, holiday, redundancy pay, and more. Make sure you understand which benefits will be available to you from your umbrella company before you sign up and remember that you will technically still be self-employed, so you should have a rainy day fund should you be out of work.
Makes life simpler
Umbrella firms are designed to take away the pressure of running your own freelancing business, eliminating the common sticking points of contractors. Simply submit a timesheet at the end of each week, and you’ll be paid when your agency pays the umbrella company. One benefit is that you’ll receive payslips, which will break down the costs and deductions for tax, national insurance, expenses, and more, allowing you to have control over your money and plan ahead for the future. If you know you’ll be paid X amount every month, you can organise trips away with family or apply for a mortgage and get onto the property ladder.
Claim back expenses from work
Finally, remember that umbrella company employees can claim back some of their expenses for travel and tools. That means you’ll pay less tax on your earnings and hold onto more of your cash. Simply keep a record of all of your expenses including invoices and receipts, and your umbrella company will calculate these when addressing your pay. Forget about hiring an accountant and needing to familiarise yourself with complicated bookkeeping software – everything will be done for you, so you can focus on delivering a great service to employees.
Are you working with an umbrella company? Let us know your situation over on social media and check back soon for more advice on running a successful contracting business.