Tax and accounting requirements a source of confusion. Trafalgar knowledge base articles aim to help explain the most frequently questioned topics and give you a better understanding of the value we give your business.

Knowledge Base

Advantages of Umbrella Companies

20 April, 2010

Umbrella Company Advantages

  • Avoids time and effort in running a Limited Company
  • Avoids cost and time required to setup and dissolve a Limited Company for a short term assignment
  • Weekly/monthly tax deductible management fee only while working
  • Umbrella Companies handle all statutory returns such as PAYE and VAT
  • Very little administration is required by the contractor
  • After setting up, the contractor completes timesheets and expense claims
  • Fast online services that include contracts, timesheets, invoicing, payments, tax etc.
  • Umbrella Companies issue pay slips that show calculations
  • Spendable income is paid directly into the contractor’s bank account
  • Some insurance and pension cover
  • Good customer support team


  • Umbrella Companies make life easier for contractors in terms of financial transactions and tax payments and leave the contractor more time to concentrate on earning more money.
  • Be careful if an Umbrella Company offers services that reduce income tax or National Insurance contributions as this is illegal.
  • Be aware that no matter whether you earn £50 or £500 a day the amount of work done by the Umbrella Company would be the same and therefore their fees should not be based on earnings.
  • Research online to find the best deal for you and talk to other contractor about their Umbrella Companies as this is often the best way of selecting the better company.

If you are a contractor and are looking for a compliant payroll solution, give us a call today to discuss our services. We provide no-obligation advice on the best solution for you.

For a no-obligation chat call us on 020 7940 1990