You are using an outdated browser. For a faster, safer browsing experience, upgrade for free today.

The Umbrella route…. The myths, the benefits and the options Sterling offer

Wednesday 25th March 2020

Sterling - The Umbrella route…. The myths, the benefits and the options Sterling offer

The Umbrella route is an ideal option for contractors what want to maintain the flexibility that contracting offers, whilst gaining the benefits employment can bring.

What is an Umbrella?

An Umbrella company becomes the employer of contractors who are usually not in a position to operate their own limited company, or prefer the security employment offers.

The majority of responsibilities expected of agencies with regards to contractors is taken over by the umbrella company. This includes eligibility to work checks, the liabilities and administration of PAYE, holiday pay and sick pay.

The benefits

In some circumstances contractors are able to claim back business related expenses. Depending on whether an individual is subject to supervision, direction or control these could include: allowable travel, PPE and subsistence whilst on assignment.

There is no burden to ensure financial paper work and tax liabilities are produced and submitted, due to the fact that, as an employee, you are not trading on your own account.

The countless advantages and the security that being in employment can bring (e.g. holiday pay, SSP and insurances) but with the flexibility that contracting affords.

Effective support from human resources and health & safety departments.

Contractors will benefit from personal accident cover that will provide compensation should they be unable to work due to an accident on assignment.

As contractors will be in continuous employment, their credit status will be improved.

The Myths

No Benefits to using an Umbrella company – not true
This one is definitely a myth. As covered above, there are many benefits to working through an umbrella company, the most obvious being the fact that the contractor becomes an employee, giving access to all statutory benefits such as sick pay, maternity and paternity pay.

Hidden charges – not true
Another misconception with Umbrella companies is that there are hidden charges. This is another myth and here we will look at why.

The only charge an Umbrella company takes is a margin. This is explained to the contractor upon registering with the Umbrella company, and it is necessary in order for the company to look after your administration.

One of the common misconceptions is around the deduction of Employer’s National Insurance. Sterling Umbrella and many other reputable companies will be open and transparent about this deduction. All employers are legally required to pay Employer’s National Insurance. When it comes to contractors, the deduction is factored into the assignment rate, and is paid in addition to the contractor’s gross pay. This can cause confusion that the contractor is paying their own Employer’s National Insurance costs, but it does not come from their gross pay, but does need to be factored into the assignment rate when this is agreed with the agency.

If a contractor is using a reputable umbrella company, there should never been any hidden exit charges. They should be free to leave whenever the assignment ends or as and when they wish to do so, and should never be charged an exit fee.

They are a scam – not true
This most definitely is not true. All reputable Umbrella companies provide a legitimate option that allows contractors to access the benefits of employment whilst working on various assignment, providing flexibility and security. Full transparency of how their payment is processed, access to statutory benefits and a contract of employment should be offered.

What umbrella options do Sterling offer?

Depending on a contractor’s circumstances and preference, Sterling has two umbrella routes to offer. Sterling Umbrella and Sterling Umbrella Plus.

Here’s some of the benefits included in our Umbrella service;

Complete peace of mind that your pay and tax affairs are being taken care of by a fully compliant organisation.

Personal Accident, Public Liability and Employers Liability included as standard.

Health & Safety
Access to our Health & Safety support and guidance.

Sterling Rewards
Discounts and rewards on a wide range of brands and services.

For those that are interested in extra benefits, we have Sterling Umbrella Plus, with all the same benefits as our regular umbrella route, but with a few extra perks.

What else you get with Sterling Umbrella Plus?

Health cash plan
A cash plan giving you access to money back on things such as; dental, optical, physiotherapy and much more.

Discounted days out
Employees of Sterling Umbrella Plus will be entitled to up to 35% off ticket prices at top UK attractions at a corporate rate with Merlin Entertainments.

Mortgage advice
All our employees will have access to free mortgage advice with our mortgage partner Faraday Mortgage Associates.

If you require further information on Umbrella companies or are interested in joining Sterling please contact us today on 01925 626200, email or go onto our website request a call back and one of the team will get back to you.

Previous article Next article