The safest and most straightforward way to be paid is through PAYE. Unlike umbrella companies, PAYE offers:
- Complete Compliance: No risk of being involved in tax avoidance schemes.
- No Hidden Costs: Umbrella companies often deduct fees from your pay, which can add up over time.
- Transparent Deductions: PAYE ensures all your taxes and National Insurance are calculated and paid correctly.
- Although PAYE might appear to offer a lower rate than some umbrella schemes, your take-home pay should be comparable after deducting umbrella fees. PAYE also eliminates risks related to compliance investigations and ensures your income is managed securely.
- Hidden Fees: Weekly or monthly charges that reduce your actual income.
- Tax Avoidance Schemes: HMRC has identified some umbrella companies engaging in practices that could result in significant penalties for workers.
- Uncertainty: If an umbrella company experiences financial issues, your payments could be delayed or withheld.
We understand that umbrella companies can seem appealing due to higher advertised take-home pay, but they come with risks, such as:
Pitfalls of Using Umbrella Companies
