Benefits for using PAYE umbrella companies

For individuals who are in a position of employment where they are required to organise and send back their own tax returns, it can be a difficult and time consuming task to do so. It is a task that can entail many people having to manually make the calculations to work out how much they should be paying in terms of things such as Income Tax and National Insurance contributions, and is a job which will cause something of a headache and no little stress to many.

Luckily for these individuals, however, there is now a solution. PAYE umbrella companies are businesses who make it their job to deal with this issue. In the most basic terms, when an individual registers with them, they are signed up under the umbrella companies name, and after the necessary information is passed over, the tax returns and contributions are worked out and dealt with for them.

There are a number of benefits for people who might want to tackle the situation in this way. We are going to take a look at some of them here.

They can be useful for people in a range of situations and industries

Umbrella companies are ready and waiting to help individuals in a range of different situations. Recognised mainly for their work with contractors, others that can make use of the services on offer include those who are in contracted roles, are working as freelancers or consultants, or interns or temp workers. These are all people for whom managing and dealing with their PAYE and Income Tax payments can be a real hassle – with an umbrella company, it does not have to be this way.

They work out as competitively priced

The costs that someone will have to pay to make use of the services of an umbrella company will vary, of course, depending on the company itself. However, whatever the price, using one can prove to be an extremely wise investment, particularly if it means someone does not have to pay a fine or further charge if they miscalculate something whilst trying to do their tax return themselves. Some umbrella companies will also not change what they charge someone depending on their earnings, meaning people have the security of knowing what they will always be paying.

Umbrella companies make the whole process easier for people, taking the weight off their shoulders and giving them peace of mind

The main service that PAYE umbrella companies offer is the opportunity for someone to have the stress and headache of tax removed. Looking at individuals in the roles we have already discussed, they are the sorts of people who may find themselves working for a number of different companies in one, single tax year, so using an online umbrella company can make a potentially difficult process a whole lot easier.

Umbrella companies can help people comply with the IR35 legislation

Introduced a number of years ago to deal with a massive loophole in the tax law, IR35 is a legislation that everyone must be working in compliance with. A good umbrella company will be able to not only provide all of the necessary information to allow people to understand the ins and outs of it, but will also help individuals to make sure they are not breaching it and risking further charges or fines.

This article takes a look at some of the benefits that people can look to reap the rewards of if they decide to make use of PAYE umbrella companies. These businesses services can be useful for those in contract, temporary and intern roles.

Author bio – Simon Wells is a freelance journalist with a wealth of experience writing about a wide range of subjects. As a freelancer, he is a regular user of umbrella companies and would highly recommend their services.

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