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How to choose an umbrella company

Umbrella companies vs. PAYE


On the face of it, there might seem like little obvious difference between working under an umbrella company and paying PAYE (Pay As You Earn) income tax via an agency payroll.

But the repercussions for your financial circumstances can be significant, so it's worth taking the time to learn a little more about the differences between umbrella companies and PAYE.

For example, you could be missing out on tax-deductible pension contributions, the ability to claim back your business expenses, and the advantages of being in continuous employment on paper.

Working under an umbrella company offers a range of benefits for contractors, including an uninterrupted employment contract, pension contributions, and paid holiday leave - but how do you choose the best umbrella company for your circumstances?


It depends on the nature of your work. The best umbrella company for contractors is the one that offers a service that covers everything you need, at a price you are willing to pay, while complying with HMRC regulations.


For example, the best umbrella company inside IR35 might not be the cheapest umbrella company overall, but it will be able to give you peace of mind that you are complying with the tax rules as they apply to you.


In this guide, we'll look in detail at how to choose the best umbrella company for contractors with different needs, as well as some general top tips for umbrella company comparison overall.


How to find a trustworthy umbrella company


First, let's look at some of the more general hints and tips on finding a trustworthy umbrella company.


Check T&Cs


Over and above everything else, make sure you check the terms and conditions of umbrella company services before you commit to anything that could affect your take-home pay.


Get a copy of the T&Cs of your chosen service in full and keep it in a safe place - don't rely on the umbrella company's online version to stay unchanged.


Some relatively simple due diligence at the outset will give you confidence that you've chosen an umbrella company that suits you.


Compare take-home pay


Take-home pay is a good first place to look for umbrella company comparison - and not just to see which provider offers you the most.


If an umbrella provider is offering you substantially more than the competition, this is a clear indication that they are probably not fully compliant with HMRC and should be approached with caution (or not at all).


Professional Passport umbrella companies


There's no central list of HMRC-approved umbrella companies, as HMRC does not issue 'approval' in that sense - but you can look for compliant companies to reduce your risk.


Professional Passport umbrella companies like Primis have been independently tested and trusted, and you can double-check a company's status on the Professional Passport website at any time.


This means you're not just relying on the umbrella provider's word to prove they are accredited and can put your trust in a respected, independent industry scheme.


Compare umbrella company services


Different umbrella companies offer their own take on umbrella payroll services, so always check the full list of features you will receive.


Some of the main things to look for include payroll solutions, whether you will receive an uninterrupted contract of employment, whether you will receive employer pension contributions and paid holiday entitlements, and the scheme's rules surrounding IR35.


Primis provides all of this information upfront for each of our services in our Contractor Hub, and we welcome any enquiries you might have about which is the right umbrella payroll service for you.




Our goal is to be the best umbrella company inside IR35, offering an employment contract with benefits such as paid holidays, pension contributions, eligibility for tax relief, and full HMRC compliance.




A standard PAYE option if you are inside IR35, with holiday and pension entitlements, plus easy implementation of relevant taxes.


Deemed Tax


A payroll solution if you want to be paid through a limited company. We calculate the necessary statutory deductions to ensure that you remain fully compliant with HMRC.


Personal Service Company


A limited company or Personal Service Company (PSC) gives you online accounts and efficient personal tax planning, but allows you to run your business on your own terms.




The Primis Construction Industry Scheme service makes deductions at source, resulting in higher net pay for contractors than employment minus HMRC deductions, while giving you online portal access and enhanced admin support.


Calculate your take-home pay


Calculating umbrella take-home pay is one of the most direct methods of umbrella company comparison and, once you've eliminated those that are 'too good to be true' (and therefore probably not HMRC compliant), it's a good basis to compare the rest.


Umbrella company take-home pay depends on the T&Cs of your service. Remember, different umbrella companies will offer different benefits. Net pay alone is not your entire income, once you take into account paid holidays, pension contributions and other remuneration.


How is take-home pay calculated?


Your top-rate of umbrella company take-home pay is calculated by taking your gross earnings and making the necessary deductions, including statutory payments, the umbrella provider's fees, and others such as accounting for employer pension contributions.


Umbrella take-home pay can be quite complicated to work out manually, but many reputable umbrella providers offer tools to help you carry out these calculations in a matter of minutes.


The T&Cs of a specific umbrella company service will also often include an outline of 'typical' fees and deductions. You may be able to request a tailored quote from the umbrella provider if you want the figures to be more specific to your circumstances. Primis offer these as standard, free of charge.


Umbrella company take-home pay calculators


For a quick and easy umbrella company comparison, make use of each provider's take-home pay calculator.


These will normally use some simple information about your income, such as your gross hourly or daily earnings, to give you an estimate of your net take-home pay per week or month under the umbrella company's service.


It's worth stressing once again that net take-home pay is not the only indicator of umbrella company comparison, but if you're looking for a certain level of income, it can provide you with a useful rule of thumb before you dive into the fine print of the T&Cs.


Ask the experts


Don't be afraid to make enquiries - a reputable and trustworthy umbrella company will be happy to answer any questions you have about their services.


Primis has a team ready and waiting to discuss your needs. To find out more, just fill in our contact form, email or give us a call on 01925 912200, and we'll get you sorted.

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