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The following should help you understand more about how umbrella companies work, what you can claim as tax deductible etc.

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What is an UMBRELLA company?

In the United Kingdom, an umbrella company acts as employer to independent contractors who work under temporary contract, usually through a specialist employment agency. Recruitment agencies will only issue contracts to a limited company. An umbrella company issues invoices to the recruitment agency (or client) and, when payment of the invoice is made, will typically pay the contractor through PAYE.  (Source: http://en.wikipedia.org/wiki/Umbrella_company)

 

Choosing the right Umbrella Company for you

Despite what some companies will tell you, the fact is that all UK Umbrella Companies have to work within the guidelines published by the Inland Revenue. This means that your take home pay cannot be any higher through one umbrella company than with another. The only thing that should be different would be the fees that the Umbrella Company charges.

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