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Umbrella Company

What are the main advantages of using an umbrella company?

A report from the Association of Independent Professionals and the Self-Employed (IPSE) reveals that 34% of self-employed workers operate through an umbrella company, and we wanted to explore and explain the advantages of contracting through an umbrella company as, according to the Association of Independent Professionals and the Self-Employed (IPSE), 61% of contractors do not know or understand them.

Umbrella companies are an essential part of the contracting world, giving access to various benefits that many would consider exclusive to traditional full-time employees. The list of advantages for contractors is extensive, but here are some of our favorites:


As a contractor you can choose your assignments, when and where you want to work and the client you want to work with.  As an umbrella employee you have the freedom without you having to worry about new contracts for each assignment and burdensome commitments. 

You’re An Employee

Working for an umbrella means that you are classified as an employee, this gives you full employment rights, benefits, and protections including holiday pay, sick pay, maternity/paternity pay and access to HR support. These are the most common reasons why contractors use an umbrella company as opposed to their own limited company, where you simply wouldn’t get access to them.

This is particularly advantageous for new contractors and temporary workers; you don’t need to worry about setting up a limited company and having to deal with its complexities, accountants, HMRC and dissolving the company once your work is completed.

Skip The Admin

Nobody likes doing admin…especially contractors with busy workloads. With Umbrella employment there is literally no admin – you just do the work you are skilled at. Umbrella companies cover all the admin, deal with HMRC and pay your taxes. All you need to do it submit your timesheet and your umbrella will take it from there.

IR35 Risk Becomes Irrelevant

Working for an umbrella removes the risk of falling on the wrong side of IR35 as you are employed by the umbrella company, therefore automatically ‘inside IR35’, meaning HMRC will not come knocking on your door in years to come. 

With the benefits available, we believe that working with an umbrella company is a great option for contractors and only recommend compliant and audited umbrella employers for your peace of mind.

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