Umbrella Companies

Date: March 03, 2009

or -  Managed Service Companies Explained

More often than not OrangeGenie's contractors are on temporary contracts of various lengths of time generally working through an employment agency where they found the contract they are filling.

A Managed Service Company (umbrella company) is an intermediary company through which workers (typically contractors) provide their services to end clients. The definition of a Managed Service Company in the legislation provided by HMRC in 2007  encompasses both ‘composites’ and ‘managed personal service companies’. This means for example a uk contractor working for BT, may use Orange genie as an umbrella company to complete all their invoicing to BT, claim expenses for the contractor, and issue pay on a weekly or monthly basis through PAYE.

The contractor may need an umbrella company because of IR35 legislation which stipulates that depending on the kind of work the contractor is fulfilling must be handled by a managed service company rather than by the contractor holding limited company status, as tax benefits were being flaunted in the past.

So Will the contractor using an umbrella be better or worse off?

There is no simple answer to this. Financially the contractor may be better or worse off. PAYE will be used to for pay rather than minimum wage and dividends only. Expenses can still be claimed. What is completely apparent is that the contractor may utilise the services of an umbrella to the full. This means that the umbrella company can handle all of the tax issues, file paperwork, claim expenses all on behalf of the contractor - allowing them to get on with their contracts knowing that they have a managed service company looking after all of their responsibilities to HMRC.

Save time, save tax and save stress. OrangeGenie have consistently scored over 98% of our contractors in 2007 were 'extremely satisfied' with our umbrella services.

Why not speak to one of our agents today who will advise you as to the best way to make use of our umbrella services.

You can request a conveniuent CALL BACK, or why not complete our online sign up now. Rest assured you will be in good hands. And what is best, we will not pin down our contractors into any lengthy contracts. We don't need to as our contractors come back month after month because of our excellent service provision.