Five ways an umbrella company can benefit your business

There is no doubt that the local Exeter business scene is on the up. Recent news such as the £3.2m investment into Lightfoot and £300m vision for the city centre certainly seems to confirm this. Of course, running your own company can sometimes be a challenge with many different things to think about. Chief among these is constantly innovating to streamline your workflow and control your costs.

For many businesses in the city, this can involve using independent contractors at times. Maybe you have a busy few months every year where you need extra help or find them useful for one-off projects that your in-house staff cannot handle. Many Exeter-based businesses will use contractors for situations like this and the fast, effective access they give to specialist skills.

Umbrella companies and contractors

If you are thinking of hiring a contractor, then it is also worth knowing about umbrella companies. An umbrella company is an external third party that acts as the legal employer for the contractor you use who is registered with them. The main service they provide is managing the payroll of any contractors you use on a PAYE basis. Many organisations who use contractors regularly will work with umbrella companies or self-employed contractors who use umbrella companies already themselves. They not only make the whole process of paying contractors much easier but also ensure full compliance on the contractor’s behalf around legal HMRC requirements over payroll.

What benefits do umbrella companies give businesses?

If you are looking for some specific reasons how umbrella companies can help your business, then the below should explain further.

Saves you time and hassle

Probably the biggest benefit that working with an umbrella company can deliver for your business is the time saved on dealing with your company payroll directly. This will not only save you money in terms of the staff resources needed to do it yourself but also free up your own staff to focus on more important core tasks. There is also the fact that umbrella companies take away the hassle of managing the payroll of your contractors personally. We all know that it can get tricky at times with numerous queries and timesheets flying around – by using an umbrella company, you do not have to worry about it anymore.

Full compliance with HMRC

Another massive reason to use umbrella companies when employing contractors is compliance. All businesses need to be aware of this issue to keep them fully protected. Although the contractor will be responsible for their own tax and National Insurance contributions, you still have to trust that they do so if you deal with them directly. By using a respected umbrella company though, you are getting total peace of mind that any contractor registered with them is fully compliant.

Easy to get hold of and professional

Using contractors is a viable business solution, but self-employed people can sometimes be hard to get hold of. It might be that they are off working for a few weeks on another project, or the contract has ended, so they do not know that you wish to talk to them. This can be frustrating if you have a query over their payroll or the work completed. Working through an umbrella company eliminates this as you have a contact that is easy to get hold of to sort out these types of query quickly.

Objective third party for disputes

Another great reason to use these kinds of companies is if you have any kind of dispute with the contractor or the timesheets they submit. Speaking with the umbrella company rather than them directly can often help the dispute to be resolved in a calmer, more professional way. As the umbrella company is a professional third party, they can often give a balanced view to resolve any problems.

Takes on insurance responsibility for employers

One factor to bear in mind when employing contractors is making sure that they have the right insurance in place to work for you. This can sometimes be tricky, as they may say that they have, but how can an employer be sure? By using a contractor who is registered with an umbrella company, this is not an issue. Most of the top umbrella firms will take on the task of insuring their own clients as the official employer, so you do not have to do this.

Contractors can help Exeter businesses shine

If you need some short-term help in your business, then there is no doubt that contractors can help massively. As this article has shown though, it is worth using one through an umbrella company for the extra benefits that this will bring. By doing this, you get all the advantages of hiring a contractor but none of the additional work that it can otherwise throw up.