What is an umbrella company?

An umbrella company is a standard UK limited company that acts as an intermediary between workers and their recruitment agencies or end client organisations. The umbrella company also acts as an employer, managing payroll and other administrative duties.

An umbrella company will typically issue invoices, receive payments and calculate all income tax and national insurance deductions. It will then pay all net earnings into the workers personal bank account and will issue a payslip to confirm all gross/net transactions.

Subject to audit, some umbrella workers may be able to increase their net pay by claiming tax relief on relevant expenses. 

Umbrella companies, such as Champion Contract Services Limited, provide all employment rights and entitlements to their workers, such as workplace pension, holiday pay, and statutory sick/maternity pay.

Many umbrella companies also provide workers with exceptional employee benefits. This can include 24-hour healthcare access and the ability to obtain high monetary value supermarket, retail shopping, restaurant, and leisure discounts.

An umbrella company is the prudent choice for workers who do not want to go through the process of setting up a limited company. Workers who stay with their umbrella companies for long periods of time will gain a continuous employment record – this is particularly beneficial when submitting mortgage or loan applications.