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An umbrella company acts as the official employer for contractors and freelancers working under IR35. It handles key administrative tasks such as invoicing, PAYE calculations, timesheet management, National Insurance contributions, and payment collection. By centralising these responsibilities, the umbrella company allows you to focus on your work while ensuring you are paid accurately and on time.

Umbrella companies provide full employee status and manage all related administration, offering a simple, low-risk solution for contractors. This approach removes the risk of unexpected tax issues and gives you continuous employment history—helpful when applying for mortgages, loans, and other financial products.

No. While you may still consider yourself a contractor or freelancer, your official tax and employment status is that of an employee of the umbrella company. This differs from operating as a sole trader or through a limited company, which typically falls outside IR35.

Yes. As an umbrella employee, you're entitled to statutory sick pay, maternity or paternity pay, and holiday pay. Your National Insurance contributions also help you build eligibility for state benefits, including your state pension.

Umbrella companies must comply with tax and employment laws. The Freelancer & Contractor Services Association (FCSA), an independent body, certifies umbrella companies that meet strict compliance standards and promotes best practice across the industry.