Umbrella Payroll Services: An umbrella company is an organization or company that employs agency contractors who work on temporary contract assignments, usually through a recruitment agency in the United Kingdom. Recruitment agencies prefer to issue contracts to a limited company as the agency liability would be reduced. It issues invoices to the recruitment agency (or client) and, when payment of the invoice is made, will typically pay the contractor through PAYE with the added benefit of offsetting some of the income through claiming expenses such as travel, meals, and accommodation.

Umbrella companies have become more prevalent in the UK since the British government introduced so-called “IR35” legislation that creates tests to determine employment status and ability to make use of small company tax reliefs. According to criteria set out by the UK Department for Business, Innovation & Skills, there are an estimated 4 million temporary workers in the UK, of whom 1.56 million are “classed as being in a management or senior official role, a professional occupation or an associate professional and technical occupation.” It is estimated that 14% of the UK’s professional contractors are currently managing their business by working through an umbrella company.

The umbrella company provides payroll services on behalf of the contractor and bills the agency (who in turn bills the client) for work completed by the contractor. The umbrella company provides all social contribution and tax payments (in some countries also “PAYE, Pay As You Earn”) and equivalents and National Insurance returns on behalf of the contractor.

An umbrella company is the simplest way to get paid for most contractors. The umbrella employs contractors carrying out short-term assignments and makes Pay As You Earn (PAYE) and National Insurance contributions – so no unexpected tax bills.

With Manpeh Mac Ltd management consultancy in London, you get a consistent employment record and access to entitlements like a workplace pension, holiday pay and maternity / paternity pay. In short, all the benefits of continuous employment as a contractor, without the admin of running your own limited company.

If you are new to contracting and looking for the easiest way to get paid, or are a limited company contractor, look no further than Manpeh Mac Ltd for a reliable umbrella payroll service in London. We process numerous payments each week and have already several limited company contractors and individuals who made the move to Manpeh Mac Ltd Umbrella Payroll Service.