IT Contractor Umbrella Company - Compare - Guides

With hundreds of umbrella companies operating in the UK, new contractors may find it difficult to choose one to sign up to. Here are some factors you should consider before joining a PAYE umbrella company.

Fees - A key factor in your choice of umbrella company. What are the weekly or monthly fees? Beware companies who charge a percentage of your invoice value as it shouldn't cost any more to process a £500 invoice or a £5000 one. Find out more in our guide to umbrella company fees.

Extras - Look out for umbrella companies who charge you a fee for joining or leaving the scheme. Find out exactly how much the company charges for things like CHAPS transfers, and if they have a minimum sign-up term.

Compliance - Watch out for companies who claim they can save you tax compared to other umbrellas. All PAYE umbrella companies are taxed in exactly the same way. Some also claim to be 'IR35 compliant', but IR35 is not relevant to PAYE umbrella company workers, so this claim is irrelevant.

Expenses - Beware of umbrella companies who claim they have a 'special dispensation' with HMRC which can save you money. You can only claim for expenses you have incurred legitimately in the course of your contract duties. Dispensations are in place to help umbrella companies cut down on the amount of administration paperwork they have to submit to HMRC, and no other purpose. Read our guide to claiming umbrella company expenses.

Online - These days, you should really expect to have access to an online administration system which can process your invoices, expenses, etc. via the web. Most of the major players use modern technology, but ask to take a look at a system demo before signing up.

Recommendations - As with many things in life, you can't beat positive recommendations from contractor colleagues. Seasoned contractors may have worked via a number of umbrella companies over time, and their opinions may prove to be very helpful in choosing the best umbrella company for your personal needs.

Further Resources

If you are new to contracting, start of with our guide to how a PAYE umbrella works.

For a complete checklist, read our 15 tip article on choosing the best umbrella company.

Check out our growing list of contractor umbrella companies.