What is UMBRELLA COMPANY? What does UMBRELLA COMPANY mean? UMBRELLA COMPANY meaning

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What is UMBRELLA COMPANY? What does UMBRELLA COMPANY mean? UMBRELLA COMPANY meaning.

An umbrella company is a company that acts as an employer to agency contractors who work under a fixed term contract assignment, usually through a recruitment employment agency in the United Kingdom. Recruitment agencies issue contracts to a limited company as the agency liability would be reduced. It issues invoices to the recruitment agency (or client) and, when payment of the invoice is made, will typically pay the contractor through PAYE with the added benefit of offsetting some of the income through claiming expenses such as travel, meals, and accommodation.

Umbrella companies have become more prevalent in the UK since the British government introduced so-called "IR35" legislation that creates tests to determine employment status and ability to make use of small company tax reliefs. According to criteria set out by the UK Department for Business, Innovation & Skills, there are an estimated 4 mil...

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