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Contractors, Umbrella companies and the Inland Revenue
From quite a small number of companies over ten years ago the number of companies offering their umbrella services to the growing contractors and freelancers market has also increased. Up to 2007 Umbrella companies could offer to pay their contractors either by company dividends with the contractor being a Director of his or her own company, or by the PAYE system. Since 2007 the only option is to pay by PAYE. Umbrella companies act as an employer to contractors and freelancers and are governed by the rules of HM Revenue and Customs and PAYE rules. Thus one company cannot promise to pay you more than others as the only difference between companies will be the level of their fees – as well as the additional services they will offer (again at a cost to the contractor). Contractors will want to look at the different company fees: reputable companies will charge a flat fee irrespective of the amount the person is actually earning as the amount an individual earns does not really change the level of admin needed. A contractor should be paying an umbrella company between £15-£20 per week but will vary with the level of services for that amount. (For example, is the fee for professional indemnity included in the fee?).
Many busy freelancers and contractors will appreciate the umbrella services as this takes much of the hassle out of their working life and enables them to concentrate on their work.
Not everybody wants to manage their own complicated accounts.
Contractors – What if you disagree about terms?
Contractors and freelancers starting off may well feel they can’t argue with their client over the terms and conditions of their contract. So they set up a contract which makes certain stipulations and a client just won’t agree. Mostly those new to negotiating contracts will feel they have to give way, especially if the amount [...]
What makes a successful contractor?
The qualities that make a good contractor are just as much to do with personality and personal qualities as it has to do with their work-related skills. The high quality work related skills are essential, but so are other qualities. 1. Flexibility – A contractor needs to be able to suss out the differences in [...]
Freelancers and contracts
In some cases the clients may want to specify the contractual terms for work – this is true for some project work that will be out for tender, but the freelancer will want to set up his or her own terms and conditions of work with the client. Much of this will be to do [...]