{"id":7782,"date":"2021-10-25T15:26:45","date_gmt":"2021-10-25T15:26:45","guid":{"rendered":"https:\/\/coolcompany.com\/uk\/?post_type=blog&p=7782"},"modified":"2023-10-02T08:17:11","modified_gmt":"2023-10-02T08:17:11","slug":"why-umbrella-companies-are-the-savior-of-the-ir35-reform","status":"publish","type":"blog","link":"https:\/\/coolcompany.com\/uk\/blog\/why-umbrella-companies-are-the-savior-of-the-ir35-reform\/","title":{"rendered":"Why Umbrella Companies are the Savior of the IR35 Reform!"},"content":{"rendered":"\n
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Why Umbrella Companies are the Savior of the IR35 Reform!<\/h1>\n\n\n\n

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Stay with me guys were almost finished! This is the final instalment on my \u201cReader\u2019s Digest Encyclopedia of IR35\u201d. So far, we have covered the what, why, who and how of the IR35 Private Sector Reform. The newly postponement has given the country some breathing space but now is the best time to prepare and avoid disruption to your business.<\/p>\n\n\n\n

Well, if you haven\u2019t guessed I\u2019m going to explain how Umbrella Company\u2019s (such as Cool Company) can remove most, if not all, of the risk from the supply chain. For the uninitiated an Umbrella Company<\/a> is an employment service provider, we act as the intermediary between the worker (contractor) and the agency or end-client. Many benefits exist in this structure for both parties of which I will delve into within this article. But in short, the Umbrella Company will employ the worker and then lease them to the agency, who then sells the services to the end-client (simples).<\/p>\n\n\n\n

To keep this easy reading, I will breakdown the benefits of working via an Umbrella Company into 3 sections. The end-client, the agency and the contractor.<\/p>\n\n\n\n

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End-clients<\/strong><\/p>\n\n\n\n

Let\u2019s start with the end-client, once the reform is in place the end-client holds the majority of the risk when engaging PSC contractors. While my advice is to correctly assess the workers and put them into either PSC contacting approved or PAYE only. Direct PAYE causes its own issues, if your business utilises a large number of contractors then the insurance liability, management of contracts, payments and employers costs can be too much for some companies to handle and can cause business inefficiencies and losses.
Here is where the Umbrella Company solves these problems, firstly the umbrella solution is outside of the scope of the IR35 Private Sector Reform, meaning no risk at all from this model.<\/p>\n\n\n\n

Additionally, the Umbrella Company is very efficient and managing multiple contracts and invoices even consolidating them if the client require it. Consolidated invoices for multiple contractors streamline your payment processes. And working under a master framework saves the monotony of signing multiple copies of contracts.<\/p>\n\n\n\n

The Umbrella Company will also be responsible for insuring the worker, and management of the contractor\u2019s employment rights under UK law. The removal of risk and provisions of a smooth process is why umbrella companies are an excellent choice to help manage the IR35 Reform.<\/p>\n<\/div>\n<\/div>\n<\/section>\n\n\n\n

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Recruitment Agencies <\/strong><\/p>\n\n\n\n

For years the recruitment industry has used Umbrella Companies, mainly to help remove the need for additional departments or headcount, alleviate the insurance risk and to help manage multiple contractors under one agreement and invoicing process.<\/p>\n\n\n\n

So, if they already use umbrellas why change with the reform?<\/p>\n\n\n\n

Well, as mentioned previously the reform can put a fee-payer liability on the agency if the PSC contractor is deemed to be a disguised employee. Using an Umbrella Company removes this risk, as the PAYE structure is outside of the scope of IR35. The reasons seem short, but this is because the partnerships between these industries have existed long before the reform was even an idea.<\/p>\n<\/div>\n\n\n\n

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The Contractor<\/strong><\/p>\n\n\n\n

Many advantages exist for the contractors who engage an Umbrella Company. However, I will focus on the main one\u2019s businesses may be unaware of. For the workers who operate through an Umbrella Company, they benefit the most from being protected by the UK employment rights act 1998. The rights cover sick pay, holiday pay, maternity and paternity pay, pensions working conditions, health and safety, fair treatment and in 2010 the Agency Worker Regulations added protection for comparable pay between temporary workers (contractors) and permanent employees.<\/p>\n\n\n\n

All of the above are managed by the Umbrella Company with additional tasks such as tax, national insurance and pension management on each payment made to the contractor. The flexibility of the umbrella model is ideal for contractors as they do not need to deregister when an assignment finishes, they can stay employed by the Umbrella Company until they secure another assignment regardless of the time between assignments. This provides the agility needed by a lot of contractors who work irregular patterns, but wish to have a continuous employment history.<\/p>\n<\/div>\n<\/div>\n<\/section>\n\n\n\n

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So here\u2019s the pitch!<\/strong><\/p>\n\n\n\n

Were all selling something right!? Well, I\u2019m no different, Cool Company is an Umbrella Company with a difference, by combining years of recruitment and umbrella industry experience we have developed a completely digital solution. Our platform enables contractors to sign-up within minutes and register a timesheet within just a few clicks. Removing all of the pain points during the contractor onboarding process. We partner with clients and recruitment agencies providing them with their own portal and giving them control of the process while maintaining the security provided by utilising an umbrella company.<\/p>\n\n\n\n

Now, do I expect you to all jump on board and sign up to partner with us, No. But I would ask you to think about the key failings in the current process you have when onboarding umbrella workers from referring them to the supplier and getting confirmation they are setup. And ask could there be a better way? Even on a small level, if the answer is yes send me an email or call me. Our conversation might be the difference between an old and tired process and excellent customer experience. To coin the old phrase, a happy contractor is a profitable contractor.<\/p>\n\n\n\n

And that\u2019s it for my IR35 deep dive, it\u2019s not the end of my articles I will continue to focus on industry compliance and the key legislation your business should be aware of to help protect you. Thank you for reading so far and I hope you enjoy the rest of my work!<\/p>\n\n\n\n

Read and learn more about IR35 and how it affects you.<\/p>\n\n\n\n

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read more about ir35<\/a><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"","protected":false},"featured_media":0,"template":"singular.php","categories":[6465,6759],"tags":[6773],"class_list":["post-7782","blog","type-blog","status-publish","hentry","category-cc-insights","category-ir35","tag-ir35"],"yoast_head":"\nAre Umbrella companies IR35 reform's savior? | Cool Company UK<\/title>\n<meta name=\"description\" content=\"The IR35 expert at Cool Company, Kris Simpson, explains his view on umbrella companies in the IR35 Reform \u2192\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/coolcompany.com\/uk\/blog\/why-umbrella-companies-are-the-savior-of-the-ir35-reform\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why Umbrella Companies are the Savior of the IR35 Reform!\" \/>\n<meta property=\"og:description\" content=\"The IR35 expert at Cool Company, Kris Simpson, explains his view on umbrella companies in the IR35 Reform \u2192\" \/>\n<meta property=\"og:url\" content=\"https:\/\/coolcompany.com\/uk\/blog\/why-umbrella-companies-are-the-savior-of-the-ir35-reform\/\" \/>\n<meta property=\"og:site_name\" content=\"Cool Company UK\" \/>\n<meta property=\"article:modified_time\" content=\"2023-10-02T08:17:11+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/coolcompany.com\/uk\/wp-content\/uploads\/sites\/3\/2022\/01\/tjej-i-byggvaruhus.png\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/coolcompany.com\/uk\/blog\/why-umbrella-companies-are-the-savior-of-the-ir35-reform\/\",\"url\":\"https:\/\/coolcompany.com\/uk\/blog\/why-umbrella-companies-are-the-savior-of-the-ir35-reform\/\",\"name\":\"Are Umbrella companies IR35 reform's savior? 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