So, your recruitment agency, or a friend, have pointed you in either of two directions: working with an umbrella company or setting up a limited company. Either option provides its own benefits, but you’re here to hear about umbrellas.

In a nutshell, an umbrella company is a payroll provider for contractors, so we act as your employer, process you wages, and offer additional support such as administration. It means you can work between different contracts and they handle your admin and payroll, so your activities are focused on finishing and finding more work.

There are plenty of reasons to set up shop with GKJ ASSOCIATES LTD as an umbrella company, and their ease of use when working is probably the main one. Here are a few of the main benefits you gain working under GKJ ASSOCIATES LTD as an umbrella company:

1. Payroll: - We take care of your payroll services, meaning we make sure you’re paid on time.
2. Taxes: - We manage your PAYE and National Insurance Contributions (NIC), so your time is freed up from taking care of your paperwork, and you be in a better position to properly handle your own workload.
3. Admin: - We provide admin support, so all of those additional tasks that take up so much time, they’re handled by us.
4. Starting Capital: -Not as much starting capital is needed, so this frees up extra money which you can invest in your business.

There’s a reason for setting up a limited company, which  is such a popular option in the UK, because it’s a separate legal entity, which means its separate from its company directors, members and shareholders, so your liability is limited if the company were to face legal action, or other such issues. They can be set up in 24 hours, but you still need to manage your own payroll and administration, so that’s why many contractors use GKJ ASSOCIATES LTD for their umbrella company services to manage both their payroll and administration, so they can get on with the job.

As a contractor, you’re still subject to tax, so there are three tax models when working with umbrella companies, whether you’re working as an employee of that umbrella company or outsourcing your admin and payroll from your limited company.

1. Mileage Expenses: - If you pass the SDC Test (Supervision, Direction or Control (SDC) is a part of HMRC’s fight against tax avoidance. SDC test is used in certain circumstances by HMRC to determine a worker’s employment status. According to the ‘agency legislation’)   you can claim work-related mileage via your payslips. This means you could claim the same expenses which was practice before the 2016 Finance Act, however any expenses unrelated to work might be paid on an annual basis, rather than monthly, which can effect some contractors.
2. Payroll Model: - If you’re not travelling or insuring many additional expenses which are work-related, this might be ideal for you. It’s up to you, but the payroll model means tax relief claims are unnecessary, and you will also have no need to complete the SDC tests.
3. Fixed Expenses: - If your expenses do not vary from month to month, having a fixed model might work for you. You won’t be subject to SDC tests, and as your expenses don’t change, your pay won’t vary when taking account for fluctuations, because there are none.

SUPERVISION

is someone overseeing a person doing work, to ensure that person is doing the work they are required to do, and it is being done correctly to the required standard.

DIRECTION

is someone making a person do is/her work in a certain way by providing them with instructions, guidance, or advice as to how the work must be done.

CONTROL

is someone dictating what work a person does and how they go about doing that work.