The 5 key benefits to a contractor of using an umbrella company ...

It?s easy to dismiss umbrella companies at first glance as incompatible with the independent, ?be-your-own-boss? incentive that motivates most professionals to start contracting careers. However, on closer inspection, umbrella companies offer vital services that play important roles in the contracting market.

The right umbrella company not only helps contractors save money by ensuring they work in the most tax efficient way possible, but also provide many other rewarding services and support like group pension schemes, inclusive insurance packages and access to independent financial advice.

Best of all, each umbrella service is tailored to suit the contractor?s personal circumstances and goals, which presents other benefits that even the most passionate go-it-aloner should consider leveraging to grow their career.

1. Eliminates the hassle of managing own taxes

A significant benefit a contractor gets for operating under an umbrella company is that the company saves him from having to manage his own payroll, National Insurance and other taxes. This is particularly beneficial for first time contractors who find it difficult to manage their taxes even with good accountants.

2. Saves on limited company set up costs

A contractor who operates under an umbrella company also saves on the overhead costs of setting up a limited company and later costs of shutting down. This benefit is particularly useful to contractors who wish to run a contracting career on a trial basis before making long-term commitments as well as those who plan to work as contractors for a limited time before moving on to other engagements.

3. Provides for administration outsourcing

A contractor who may not wish or be in a position to take up the role of company director can also benefit from administration outsourcing services the umbrella companies provide. An outsourcing service frees the contractor to concentrate more on her work rather than having to engage in time and money consuming administrative tasks like chasing late invoices.

4. Protects from IR35 employment taxes

It is important that contractors are considered ?self-employed? or at least part of their work contracts are IR35 tax free. All contractors who do not satisfy Inland Revenue?s definition of ?self-employed? are subject to IR35 taxes. The IR35 taxes result in increased National Insurance and tax liability, which can hinder the growth of a contractor?s business. Contractors operating under an umbrella company are able to satisfy more of the taxman?s pointers to ?self-employment? and free their incomes from the IR35 tax rules.

5. Presents a flexible alternative contracting route

Not every contractor wishes or is able to set up his own limited company. Umbrella companies offer a flexible alternative contracting route to do business. Operating under an umbrella company is not binding. A contractor may opt to review her business model at any time and switch to a limited company whenever she pleases, which is not easy to do when moving from a limited company.

All contractors need to be clear about the contracting experience they aim to get from the outset. This will ensure they find the right consulting company and reap the full benefits of reliable umbrella service. Carefully consider umbrella companies and choose a company that guarantees contractors all the benefits enjoyed by professionals in permanent employment, while at the same time safeguarding the rewards that come with working as an independent contractor.

Written by David Webster. David has worked at Dasa Consulting Ltd. in Borehamwood, England since 2008. He currently deals with IR35 issues in their contractors accountancy department. David studied finance at university and is currently studying to take an ACCA qualification, he hopes to go on an become a chartered accountant.

from your own site.

Source: http://www.enprointernational.com/the-5-key-benefits-to-a-contractor-of-using-an-umbrella-company/

artie lange nascar daytona 2012 kasey kahne angelina jolie right leg saving face academy award winners best picture