A guide to freelance and contractor umbrella companies

If you’re a freelancer or contractor, you may have heard a lot of talk about organisations like Parasol – but what is an umbrella company? Well, we aim to make life easier for freelancers and contractors, by giving them employee status. Since 2000, we’ve had over 47,000 employees, who have enjoyed all the support and security of an employment contract as well as the freedom of being their own boss. But how does an umbrella company work? We’ll explain it all in this step-by-step guide.

  • Become a Parasol umbrella company employee. You can do it online and it only takes a few minutes.
  • Do what you do best – provide your specialist skills to a range of companies and clients. All you need to do is tell us the name of the recruitment agency or client and the assignment you are planning on working on.
  • Use My Parasol to fill in your timesheets and provide details of any legitimate business expenses.
  • We will invoice, chase and receive the money that is due to you.
  • We can ensure you’re business expenses are offset against your taxable pay, maximising your take home pay.
  • We deduct the correct amount of PAYE and NI from your wages before sending them on to you – so you’ll avoid the hassle of a tax return, and the costly mistakes that can be made when filling it in.
  • Receive your full wage packet direct to your bank account, within 2-3 working days of us receiving your payment from the recruitment agency or client or the very same day with our additional same day payment service.

It really is that simple. As you can see, umbrella companies for contractors and freelancers can offer a drastic reduction in paperwork, so you’re free to get on with your work. However, what many of our employees like best about Parasol is the security and protection an umbrella company provides. You won’t have to go chasing your money and waiting for payments, you’ll have HR support and financial advice on demand, and of course you’ll be covered by our insurance while you’re on the job. Meanwhile, you’ll have the freedom to choose your assignments, projects and working hours – so for many freelancers and contractors, an umbrella company is the best of both worlds.