Contractor Umbrella Companies - Top Tips For Choosing The Best

Contractors use umbrella solutions providers as a convenient trading vehicle when they are caught by the IR35 tax or don't want the hassle of running their own limited company. But there are nearly 200 firms in the UK that offer these services, and many more overseas, so which is the best one for your contracting needs?

Here are five tips to help you choose:

1: Look At Comparison Websites And Online Sources

There are many online sources providing lists and reviews of suppliers. Portal websites aimed at freelancers also include many adverts that you can use to help you find good candidates. Draw up a shortlist that includes your top ten firms and start researching them. Blogs, chatrooms and forums are good sources of feedback from other customers. Also ask people you work with - personal recommendation is very helpful.

2: Research Background, Location And Finances

Take your shortlist and for each entry, find out about how long the firm has been in business, where it is based and its history. You should consider obtaining a credit reference to make sure the company is financially sound. If you discover that the provider is based offshore, it may not be an umbrella at all, but an offshore tax solution.

3: Check The Price And What Is Included

Prices can vary from free to ten pounds a week upwards, with most services priced at around twenty to thirty pounds, paid weekly and deducted directly from your earnings. You may find that some lower-priced services charge extra for processing expenses and making faster payments. For each entry on your list make sure you confirm the price and exactly what you get for your money.

4: Find Out About Compliance

When you join, you should become a full-time permanent employee with a formal contract of employment. You should expect to be told exactly what expenses you can claim and informed you must keep receipts. If not, this should set alarm bells ringing about compliance. Most reputable firms have been audited by and are members of trade associations helping to demonstrate that they are compliant.

5: Customer Service And How Quickly Can You Start?

You are buying a service and so you should expect excellent levels of customer care. That might mean access to a dedicated account manager who knows you and your history. Many companies offer various degrees of online support, some with web-based timesheet submission and expenses forms. If you are beginning an urgent contract, you might need a same-day or next-day start. You should find out if there are any penalties when leaving and what your notice period will be. Because there is such a choice of umbrella solutions providers, you don't have to stay with one that does not give you the service you require at a price that suits you.

Selecting service suppliers can be a challenge for small freelancer businesses, particularly for knowledge workers where time is literally money. However time invested up-front can pay dividends in the long term through savings in fees and better service.