Umbrella Company Services

As a contractor, one of the most important decisions you can make is whether to establish your own limited company or work under an umbrella company. Though there are plenty of benefits to contracting under your limited company, a growing number are turning to umbrellas for the simplicity.

Our guide will help to outline what an umbrella company does and why this may be the answer for you.

What is an umbrella company?

An umbrella company is a separate company that acts as an employer for contractors working on fixed term contracts. They also serve as an intermediary between the contractor and their end client or agency. The principle function of an umbrella company is to organise payment for the contractor. To do this they collect the contractor’s earnings from the end client or agency and then pay it onto the contractor with tax, National Insurance contribution and their own fee deducted.  

Is an umbrella company best for me? 

If you earn less than £25,000 or are on a short contract and don't intend to stay contracting for long, an umbrella may be the best option for you. Though you may take home less than you would through a limited company, many contractors opt for the simplicity of working under an umbrella.

Contractor expenses using an umbrella company

By claiming all appropriate allowances and expenses you can minimise your tax bill; however, this is not a way of avoiding tax. Receipts should always be kept for all the expenses that you claim. Remember it is you who HMRC will investigate and not your umbrella company, be very cautious of companies who say you do not need to keep receipts and can claim for things you have never actually bought. If you can't prove it HMRC will view it as tax avoidance.

For a full and comprehensive list of what you can claim, click here. You may also like to read our Guide to Contractor Expenses and take home pay case studies of a contractor who is using an umbrella company and another who's working through their own limited company.

Support with contracting 

Whether you decide to go limited or use the umbrella option, support is available. SJD Accountancy provides umbrella company services to contractors and freelancers through its sister company, Parasol. For more information, you can visit the Parasol website or give their Best Advice team a call on 0800 464 0513.

Call Back Request

8 + 4 =
Solve this simple math problem and enter the result. E.g. for 1+3, enter 4.

Speak to a
friendly expert
01442 275789

Monday to Friday (8am to 6pm)

SJD Accountancy

SJD Accountancy are the UK's largest specialist provider of fixed fee, Limited company accountancy services to contractors; we've been acting for contractors across the UK since 1992 and have more than 15,000 clients.

We are the only national specialist firm of contractor accountants with offices nationwide. SJD Accountancy has more qualified staff than any other firm in our market with qualifications from the following major tax and accountancy bodies - ATT, AAT, CTA, ACCA, CA, ACA and FCCA.

  • Unlimited face to face meetings. This is a unique service only SJD Accountancy offers - unlimited face to face meetings across the UK - tax is complicated and sometimes only a meeting will do.
  • UK's Largest contractor accountants with more qualified staff. No call centres, no outsourcing, no automated call handling. Simply telephone, email or meet your own dedicated accountant face to face.
  • Money back service guarantee. All your Emails received by 4pm on any normal working day will be answered the same day. Should it be necessary to leave a telephone message it will be answered same day/following day latest or we will make a full refund of that months fee.
  • Outstanding reputation. We have won more awards for customer service and accountancy excellence than any other firm in our market, including: Best Accountant for Contractors, Accountant of the Year and Best Professional Service Team to name just a few.
  • All inclusive low cost fixed fee accountancy package which includes completion of accounts*, payroll bureau, dividends and corporation tax computations, personal taxation, free bookkeeping software, your own dedicated accountant* and all company returns for a fixed fee starting from £120 plus VAT per month. Check our packages for more detail.

If you have any questions about contracting or would like any further advice please call our new client services helpdesk on 01442 275789 or email: janice@sjdaccountancy.com. Our new client services helpdesk is open Monday to Friday (8am to 6pm).

Appoint SJD Accountancy and never worry about your tax or accountancy affairs again.

Form your own Limited company with SJD - our same day online company formation service includes company bank account set up, VAT/PAYE registration and advice on optimum share structure. 

You may also find the following pages, guides and case studies useful:

*If you would like us to complete your company year end accounts we simply ask that you have been a client of SJD for one year or have made 12 monthly payments. All accountants are part or fully qualified.