Set yourself free from hassle with an umbrella company

It is time that people start thinking about the term or word “Umbrella” as more than just an item that is useful for protecting you from harsh weather conditions in the United Kingdom. The current times, relate this word to an umbrella company. This concept is becoming increasingly popular these days. For individuals who consider working as freelancers or becoming self employed, this term is quite new, and they might not know exactly what such companies actually do.

The umbrella company is simply an organization or entity that combines together various contractors or individuals who aren't in the possession of permanent employment. These individuals or contractors include IT consultants, engineers or builders. There are various reasons why such people opt to join umbrella companies.

People usually choose to do contracts since they need more independence and freedom. Working and earning alone often means that you become the sole person responsible for all the processes of filing tax returns that HMRC needs from you legally. The people who already have an experience in filing the returns or accountancy will tackle these concerns themselves. However, in spite of the government claiming that tax filing is not taxing, completing the paperwork adds numerous hours to your work schedule, and this is the exact reason why people opt for an umbrella company.

Guide for Setting up A Company

Setting up a company only takes a few simple steps and as a contractor it can often be harder finding freelance work that it is setting up a limited company.

You will firstly need to fill out a couple of forms which are both available from Companies House.  These forms are Form 10 which will identify the limited company as well as the directors and officers, and Form 12 which declares your intention to file the company. Once you have completed these forms you will need a Memorandum and Articles of Association

Once preparation of all these documents is complete then will then need to be filed with Companies House and the relevant fees paid. While these documents are being filed a contractor can still carry on working as a freelancer and can do so up until the company is registered and a certificate issued. You should receive your certificate after about 10 days and this will then enable you to open a business bank account that will be in the name of your newly registered company. You may need to register your company for VAT with the HMRC is you are going to provide services covered under VAT.

The main benefit of setting up a company is the credibility it adds to a contractor as it shows they are no longer freelance, but instead owning and running their own business and this added credibility is priceless.