Back to Basics - What is an Umbrella Company?

An Umbrella Company is a ready-made Limited Company that is owned and managed by an accountancy firm such as Icon Accounting. The Umbrella Company acts as an intermediary between the contractor and their end client or recruitment agency. While in an Umbrella Company, you the contractor will receive T&C’s which will outline the agreement between you and the Umbrella Company. Your recruitment agency or end client will then issue a contract for services which is between your Umbrella Company and the recruitment agency or end client. The main purpose of the Umbrella Company is to ensure all invoicing, tax affairs and payments are looked after for the duration of your contract role, so you wouldn’t need to worry about any administration work. All you would need to do is send on your weekly or monthly timesheet outlining the days you worked. Your invoice would then be sent from the Umbrella Company to your end client or recruitment agency. Your recruitment agency or end client would then send your payment to the Umbrella Company’s bank account. Your assigned Payroll Account manager will then process your payment, deducting taxes and will then send your payment to your personal bank account.  You will receive a payment reconciliation breakdown to your personal email address. Using an Umbrella Company while contracting is a simple alternative to setting up one’s own Limited Company. The Umbrella Company is a great option to consider if any of the following apply to you:

• You do not want to set up a Personal Limited Company

• You are a first-time contractor

• You need to set up immediately

• You are contracting short term

• You wish to keep your Class A PRSI contributions towards your Social Welfare Benefits.

If you have any questions about setting up under an umbrella company, please get in touch with our office by phone (01) 8077106 or email: info@iconaccounting.ie