Umbrella companies are similar to any other business especially when it comes to going through bad management, changes in legislation and changing market conditions. These companies can become bankrupt in any of these circumstances. And when this happens, the contractors are the last ones to find out about it. The other creditors will always be preferred.
Therefore , the contractors have to protect themselves against anything like that. They're going to have to identify the signs that may probably tell about a company running improperly. Likewise, there are signals that will tell if a company is going to face issues when the suggested changes in legislation get approval from the Parliament. As a contractor, you have got to look for these signs.
When you use umbrella company, you become a worker of the company. If a company does not offer you a worker contract, then it's not the company to go for. You have got to be a real worker in order to stay safe in circumstances like the ones mentioned above.
When you use an umbrella company, you become a worker. This implies that you should be paid even when you're not in a contract since you become employee of the company after you agree a contract with it. The corporations will most likely top-up their charges to get to the minimum wage. If a company does these practices, then you never can say how many other laws the company is flouting.
Eventually, a good umbrella company must take the responsibility to pay you in case the customer becomes bankrupt. If your umbrella company doesn't state that in its terms and in the contract, they would like you to sign, then you need to avoid using that umbrella company. You will always face the specter of not being paid since the clients often become bankrupt in difficult money eventualities.
Greg Dickson is head of marketing for the Bedouin Group, one the number one suppliers of umbrella company solutions for contractors and self employed staff. Bedouin Money also provider contractor mortgages, contractor tax calculator and pensions.