What is an umbrella company?
In the UK, an umbrella company directly employs contractors and freelancers who wish to work inside the IR35 regulations. Generally, an umbrella company's services are administrative and accountancy-based - such as managing timesheets, calculating PAYE tax and NI contributions, invoicing the client, collecting monies and paying the contractor.
Why would I choose it?
An umbrella service gives you legal employee status and handles all the paperwork. It's the simplest solution for most contractors, with no unexpected tax bills and because you have one continuous employment it's much easier to secure important things like loans and mortgages too.
How does it work?
When you decide to join an umbrella company, it becomes your employer. The umbrella company invoices the agency / end client and the agency / end client pays the money direct to the umbrella company. The umbrella company will then deduct PAYE and National Insurance contributions before paying you your wage.
How do I join, how quick is the setup, and are there any related costs?
There are no setup charges. It's so easy to join us - you can sign up in just ten minutes! You can join directly using our online joining portal or by talking with one of our experienced advisers on 0161 929 6000 (option 1) who will go through what you need to do over the phone.

Do I have to be signed up with an agency to use your umbrella company?
No, we are happy to work with any end client. All we need are their contact details and we will contact them on your behalf in order to discuss, agree and set up the contract and payroll process.

Umbrella Company Guidance


Help Videos

How does the My Max umbrella company from PayStream work?
How does the My Max umbrella company from PayStream work?

If youre new to contracting, then working under an umbrella company is arguably the best way for you to work. But what exactly does this involve?

An umbrella company will employ you under a contract of employment, so whether you carry out one assignment or 100, you will be employed under the same contract. An umbrella company covers all of the payroll and administration aspects associated with working on temporary assignments, while also providing you with the usual employment benefits.

Umbrella companies are quick to join and can have many advantages. If you work under an umbrella company, such as PayStream's My Max, you become an employee of the umbrella company. This means that you dont need to worry about paying your own taxes, complying with IR35 or keeping detailed accounts.

Instead, PayStream will invoice the agency or client on your behalf and then handle your pay-as-you-earn income tax and national insurance contribution deductions, just like any other employer would, meaning that the wages you receive at the end of the process are yours to spend.

Umbrella companies are ideal if you're just starting out on temporary assignments and if you're particularly worried about managing your own taxes and staying out of trouble with HMRC. It's also good if you only want to work in this way for a short period of time.

What's more, it takes just ten minutes to join PayStream My Max.

If you'd like to find out more about how an umbrella company could help you, then get in touch with one of the PayStream team today. 

Join Paystream in Less than 10 Minutes
Join Paystream in Less than 10 Minutes

Joining PayStream comes with a raft of benefits, but joining up is simple and can take you under ten minutes to complete.

Our experienced advisors are on hand to answer any queries you may have about joining and will work with you to discover what could be the most tax efficient service for you. You're then able to go to our online joining portal, which will seamlessly take you through the process.

All you need to do is log in, add your details, agree to the employment contract and you're there. We help keep the time down by checking your identity online and by sourcing a P45 or P46, we can ensure that you do not pay too much tax at the beginning of your assignment. We'll also deal with your agency and consultant to ensure that funds relating to your assignment are received on time.

That's all there is to it; you're now with PayStream and as a result you can access our reward scheme, create your own suite of handy online tools and much, much more.

Join today at paystream.co.uk or speak to an expert on 0800 197 6516. PayStream it makes perfect sense.

Umbrella Vs Limited Company - What's best for you?
Umbrella Vs Limited Company - What's best for you?

When you decide to work on a contract basis, you can either work through an umbrella company or become a limited company contractor. But before you decide on which option is best for you, there are a few things you need to consider.

First off, you need to think about how each of the options work with an umbrella company, it's pretty simple as it becomes your employer. This means that your agency pays the umbrella company, and the umbrella company deducts the necessary PAYE and National Insurance contributions and pays you your salary. Theres very little admin to do.

Even though an umbrella company is the simplest way to work, it isnt the most tax efficient. By comparison, if you set up as a limited company contractor, as a shareholder and director, you can draw some of your funds as a dividend rather than being paid a full salary, so your overall tax burden is reduced.

Although the limited company route is the most tax-efficient way to work it isnt the simplest. As the director of your own limited company it is your responsibility to ensure all of your company paperwork and admin is taken care of, but thats where we can help. Our limited company service, My PSC, is a safe pair of hands that provides help and advice on running your limited company, leaving you to get on with what you do best - contracting.

Making your choice also depends on what kind of contractor you are if you only plan on doing it for a short spell and don't want to go to the effort of setting up a limited company, an umbrella company could well be the answer for you.

However, if you want to work for numerous clients, be tax efficient and want full control of your finances, a limited company may be best. To work in this way you also need to ensure that your working practices and contracts make you a genuine contractor, as defined by IR35 legislation, rather than a disguised employee. If youre unsure of your IR35 status PayStream offer an IR35 review service which is free to existing PayStream My PSC customers.

Inevitably your circumstances will change, so you may initially choose to work through an umbrella company but then as your career develops, see more value in setting up a limited company. That's doable, but keep an eye on your IR35 status if you follow that path.

So whether you want to work through an umbrella company or you need help with setting up and running a limited company, contact PayStream it makes perfect sense. 

Find out more about our umbrella services
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