An umbrella company employs contractors working on temporary assignments or contracts. Joining a compliant umbrella company gives you the chance to enjoy increased flexibility, while taking advantage of the rights and benefits a permanent employee would typically receive.

There are a variety of benefits to joining an umbrella company. You will enjoy the same protections as any other employee and may be able to claim tax relief on some business costs and expenses – subject to the SDC status of the assignment. Depending on the Umbrella Company, you may be able to benefit from reward schemes, private healthcare plans and referral incentives.

This depends on a variety of factors. The assignment rate, IR35 status of the assignment and duration of the contract will all impact on this decision. An umbrella company may be better if you are new to contracting and intend to be contracting for a short period of time, or your contract is inside IR35.

Using a compliant umbrella company will mean that you are an employee and therefore there will be minimal administration. Simply fill in your timesheet online and the umbrella company will do all of the rest.

As your employer, the umbrella company will need to ensure that you are covered by their insurances. At Parasol, we provide employees with Professional Indemnity, Employers' Liability and Public Liability Insurance.