As we enter into a new year, it’s always a good opportunity for contractors to look back over the year that has passed, and forward to the year ahead.
This is an excellent opportunity to look at what has gone well in your contracting career and what has worked for you.
If you contract with an umbrella company, this is also an excellent opportunity to review whether the umbrella provider you work with is working for you.
In this guide, Umbrella Search explains 3 key signs that it is time to switch umbrella companies so you can start the new year right.
What is an umbrella company?
Before we look at whether your umbrella company is working for you, let’s first outline what an umbrella company is and how it should be acting for you.
An umbrella company acts as an intermediary between the contractor and the client. This means that they are responsible for invoicing the client, taking payment from the client, and, in turn, paying the contractor. They will process the contractor’s pay through their payroll, which means that all tax and National Insurance will be deducted, and the contractor can rest assured that they do not need to worry about tax returns and tricky financial calculations. They will also process legitimate business expenses on your behalf which are tax deductible.
On top of this, the umbrella company also covers the contractor with statutory benefits, which include holiday pay, sick pay and maternity/paternity leave.
They will also ensure that the contractor is covered with a minimum level of insurance required to carry out the contract at hand. Others will also ensure you have the right cover if you need specific cover types.
Finally, they should be there to help and advise you, whether you need help with childcare tax credits or perhaps want to know about things like salary sacrifice.
So, how can you tell if it’s time to switch umbrella companies?
1. Umbrella company fees
In return for the many benefits the umbrella company offers the contractor, every provider will charge a fee.
Umbrella company fees remain competitive. However, it’s always worth knowing how much you pay and whether you could find a better deal elsewhere. After all, every contractor wants to maximise the money in their pocket at the end of the month.
If you are utilising a range of services that are above and beyond the basic requirements of the umbrella company, you can expect to fork out more for the benefit of this. However, if you are merely using the essential services of the umbrella company and feel you are paying a fee that is too high, it’s time to shop around.
It may be the case that you are paying a percentage fee, meaning you pay your umbrella company fee as a percentage of your income. You may have started working on higher-value contracts and are now paying far more in fees than you used to but receiving the same services in return.
Or, perhaps you rushed into signing up with an umbrella company and didn’t shop around in the first place and think you could secure a better deal.
If that’s the case, you should research to compare different umbrella company fees to ensure you secure a fair deal.
2. Level of services
We’ve already laid out the basic services that all umbrella companies offer. However, not all contractors are the same. Some require more support and extra services to really get the most of out of their contracting careers.
For example, some contractors will require same-day payments for their work, but not all companies will offer this.
Or, perhaps you want to know about maximising the benefits of your pension, needing advice on how much you should contribute to your pot and whether you would benefit from salary sacrifice.
You may find that you have outgrown your current provider and are now in need of an umbrella company that can offer those additional levels of support. If this is the case, it’s worth looking around for a provider that can provide you with everything you need.
3. Customer service isn’t up to scratch
You might find that your current umbrella company isn’t offering the levels of customer service you’d expect and benefit from.
Whether it’s unanswered enquiries or late responses, if you think you’d benefit from a more hands-on approach from the umbrella company, it may be time to switch.
A surefire way to find an umbrella company with an excellent track record of customer service is to look through other’s reviews and testimonials. Although these don’t tell you everything, if an umbrella company has hundreds of 5-star reviews outlining their excellent customer service, you can trust that you will be in safe hands.
How to switch umbrella companies in 2025
Having read our guide on whether it’s time to switch umbrella companies in the new year, the next step is to take the leap and find a new one that’s better suited to you.
Thankfully, Umbrella Search is here to make this quick and easy.
Rather than spending hours researching and doing due diligence to find the perfect provider, Umbrella Search will take on the task for you.
We will get to know you and find out what you are looking for from your next umbrella company and the areas in which you need help and support. Next, we will do the research to provide you with a list of the best-suited companies for your contracting needs.
Whether you’re looking for more competitive fees or additional guidance, we’ll make sure we find you the best umbrella company.
To see how we can help and to kick start 2025 in the best way possible, simply get in touch with Umbrella Search today.
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