Umbrella companies were first set up in April 2000 when the legislation IR35 was introduced and immediately became a popular option for contractors and freelance professionals.  The reason for this was due to the tax efficient take home pay they achieved whilst paying PAYE tax and NIC. This gave the contractor peace of mind of knowing  they were 100% compliant with IR35.

The Umbrella Company also proved popular with contractors whose contract was outside of IR35 but were on short term contracts and wanted a quick and easy set up. They are also popular with any contractor who simply does not want the worry, administration burden or costs associated with running their own limited company.

Word of warning – some companies may market themselves as Umbrella Companies but are in fact Composite companies. If they pay in any form of dividend payment they do not represent the 100% guaranteed compliance that a PAYE Umbrella Company does.

Umbrella versus Umbrella

As many contractors will tell you not all Umbrella Companies are equal, in fact the difference can be huge.  For this reason it is important to ensure that the company you use is right for you.  When choosing an Umbrella Company it is important to ensure the following

• They are compliant with all HMRC legislation
• They operate a same day invoicing service
• They operate a daily payroll service
• They have full insurance cover – note some may charge extra for this
• They give you a single point of contact
• They provide a pro-active service
• They can give you advice to ensure you are gaining the utmost from your  umbrella company
• They can organise a set up within 24 hours

MyPay provide all of these services to all of our members, all of which are included at no extra cost. 

Moving from Umbrella to MyPay

If you feel that the service you are currently receiving from your Umbrella Company is not up to the standard that MyPay offer then why not move?

This is extremely easy and can be done at any point within your contract, not just at an extension or new contract.  All you simply have to do is to fill in the on-line application or give one of our highly trained new business team a call to register.

We would then get in contact with your agency on your behalf (It is advisable to drop them an email to let them know, as they will need your permission before changing).  All that is left then is to request your P45 from your umbrella company, which they are legally required to send you, and in the meantime fill in a P46.  This is all normally completed within 1 business day so you can get the benefit starting that very same week. So why wait?