Not all Umbrella Companies are the same
Over the past 10 years the demand for flexible workers has grown massively, and the subsequent increase in contract working has led to umbrella companies springing up all over the place. There are now an estimated 250 umbrella providers in the UK, and while this gives contractors a wealth of choice, it can be difficult to sort the wheat from the chaff.
Here we take look at key differentiators in the umbrella company sector, and what to base your decision on, whether you are a contractor or a recruitment agency.
These are features which are common to all legitimate Umbrella companies. If you are a contractor looking for a compliant payroll provider, or a recruiter seeking to add to your PSL, this should form your initial checklist:
- UK owned and registered with no off-shore affiliations
- VAT registered
- Carry out proper right to work and ID checks
- Over-arching employment contracts with Umbrella employees
- Full PAYE tax and NIC (Employers and Employees) applied
- Pay statutory payments, eg. SSP, where there is entitlement, and holiday pay
- Robust expenses procedures, in line with HMRC rules, including compliance with the 2016 legislation around travel and subsistence
- Pay at least National Minimum Wage and expenses are only reimbursed above this
- Offer an approved workplace pension
- Provision of insurances - Public Liability, Professional Indemnity, Employers Liability, Drivers Negligence & Personal Accident
These prerequisites narrow the playing field and mean that you are only considering providers who are operating compliantly and won’t land you in hot water with the tax man.
But how is one better than the other?
Service - What emphasis do they put on the customer experience? Will you be treated as a person or a number?
Straight talking - Do they explain their services in clear, layman’s terms? Or try to baffle you with jargon?
Efficiency - How quickly can you register? Will they pay you on time, every time?
Price - Is their pricing transparent? Are their margins reasonable? Beware of too low as well as too high.
Size - Are they big enough to be able to work with the major players in UK recruitment but still able to give a friendly, personal service?
Flexibility - Do they have experience in the sectors you operate in? Can they adjust their working practices to suit you?
Technology - What tools do they provide to make your life easier? For example do they have an online portal for expenses?
Benefits - What added value can they bring you? Do they run any promotions or have a member benefit scheme? Find out about Liquid Perks
The icing on the cake…
If you want the best the industry has to offer, it is difficult to look further than full members of the Freelancer and Contractor Services Association (FCSA).
They set the highest of benchmarks for UK Umbrella companies, and so far only 15 providers have made the grade. Liquid Friday are proud to be one of them.