Last updated on April 13th, 2015 at 02:10 pm
Struggling with your own business? How an umbrella company could help.
For anyone who is struggling to cope with the trials and tribulations frequently associated with owning and operating a small business, employing the services of an umbrella company can be a useful solution. The small business/umbrella company relationship is akin that of the employee/employer and such an association can help the owner improve the efficiency of various aspects of their enterprise, not to mention giving them extra time to concentrate on growing the business.
First off, an umbrella company can help immensely with the accounting aspect of the business. The umbrella company receives payment from clients on the business’s behalf and completes all necessary year-end tax returns. The umbrella company also takes care of deducting the taxes from each paycheck going to the business. Where applicable, National Insurance deductions and returns are also made by the umbrella company.
Usually, the only thing that the contractor or small business owner has to do in order to ensure he or she is paid correctly is hand in a timesheet. The lack of paper work can be refreshing to contractors who just want to focus on the quality of the job they do. Business owners who are not mathematically savvy will benefit especially from this aspect of having an umbrella company, particularly because deducting the incorrect amount could end up proving expensive. Each umbrella company makes different promises, but several guarantee that the contractor will receive their payment on the same day that payment is received from the client.
The umbrella company also prepares invoices for the contractor and usually pays out to the business having already reclaimed the expenses that are deductible; most often, these expenses include accommodation and travel. In this way, the umbrella company does all it can to maximize the amount of money taken home by the business owner.
The administration of a given business is also improved upon by the use of an umbrella company. While the accounting duties are being taken care of for them, the small business owner can concentrate on proper staffing, along with planning the business’s next move. Anyone who has trouble organizing themselves will certainly benefit from the administration help provided by an umbrella company.
Another major advantage of using an umbrella company is that insurance is often included in the deal. This often includes liability insurance, along with professional indemnity insurance. In the United States, the latter is often referred to as errors and omission insurance. If not for the umbrella company, the business owner would have to purchase these insurances, which is just one more hassle that they can do away with when they use an umbrella company.
All the points mentioned above are good reasons to look into the advantages of using an umbrella company. Depending on which umbrella company the contractor works with, there also may be other perks, such as help obtaining work permits. Starting a relationship with an umbrella company can mean the beginning of a whole other life for the business, not to mention its owner.