Running an Umbrella is a very rewarding experience. Providing a compliant and easy to use/understand service to Irish based contractors allows for a lot of job satisfaction and personal reward. Having been contractors ourselves we know that contractors want as little fuss as possible and want to have surety on what they will receive and when they will receive their pay packet. Let’s now discuss the basics of an Umbrella service.
What is an Umbrella service? An Umbrella Company acts as an employer for contractors on a fixed term contract, with their principal responsibility to arrange payment for the work carried out and to ensure all relevant employment taxes are deducted. The worker has a contract of employment with the Umbrella Company and is paid as an employee, receiving a payslip each time they are paid. Using an umbrella company is the main alternative to setting up your own limited company, the main difference being the way that you are paid. Through an Umbrella Company you are treated as an employee, but still, enjoy the benefits of being able to move between contracts freely. So we see an Umbrella offers a contractor a secure and compliant way of getting paid – however, 1 important note – this only relates to a PAYE Umbrella service. You can learn more about the service here https://www.accounting-pro.ie/umbrella-company-guide/
There is another service in Ireland and this is something known as a ‘Director Umbrella’. As a contractor, you should give this a very wide berth. A Director Umbrella is effectively a managed service company. This structure has led to a lot of challenges for contractors, particularly in the UK. The argument made tax wise there is it is disguised employment and not a real Limited company owned by a contractor. These structures are not owned or run by the contractor and if something goes wrong can lead to serious issues into the future. You can learn more about the subject here https://www.accounting-pro.ie/why-we-dont-offer-director-umbrellas/
When you offer a PAYE Umbrella service the important thing is to look at what you can do laterally for the contractor that uses the service to improve their contracting experience, increase their net income and provide them with as many helpful services as possible. We provide tax reducing PRSA options, discounted healthcare, tax-deductible One4All vouchers, banking assistance and much much more all to make the contracting experience as pleasant as possible.
Accounting Pro is Ireland’s premier contractor accounting service. We are here to help, the busy contractor and company, with all your accounting and payroll needs. We are both an umbrella company and umbrella corporation and we can create your limited company. We are experts in contractor pensions, contractor health insurance, illness and sick benefit for the self employed and contractor expenses. To learn more about what we do please review https://www.accounting-pro.ie/ and contact us by email: firstname.lastname@example.org or phone us 01 6933370. For the UK see Accounting-Pro UK. “The Umbrella’s Point Of View” is an article written by Accounting-Pro Ireland for the benefit of everyone. Feel free to share it but please give attribution on a CC BY-SA license.