Since the Managed Service Company Legislation was introduced in the 2007 budget, there is only one choice for an umbrella company, and that is the PAYE umbrella company model. The PAYE umbrella company treats all your taxable income as salary, meaning that you pay employer's National Insurance payments, employee's National Insurance contributions and PAYE tax on all your taxable income.
We are required by law to withhold your holiday pay which is 12.07% of your wage. This is deducted before tax, held separately and then paid out to you (taxed) whenever you wish to take holiday. If you finish your assignment let us know and your holiday pay, along with your P45, will be sent to you.
The advantages of using umbrella companies are particularly relevant for small businesses. After selecting your umbrella company, forward your timesheets to them and they will then invoice your agency. As soon as the money is received by the umbrella company, they will normally complete your payroll the same day.
Umbrella companies take the hassle out of running a business. By using the services of an umbrella company like Top Line Management UK Limited you can significantly reduce your paperwork.