How to find the best umbrella company

If you’re new to independent working, you may be looking for the right employment solution. 

One option is to work via an umbrella company. Umbrella companies offer the freedom and flexibility of self-employment alongside the security of permanent employment – and peace of mind when it comes to tax compliance.

If you’re currently shopping around, it goes without saying that you’ll want to choose the best umbrella company. But how do you separate the best from the good and the good from the bad? 

Read on to find out how to identify the best umbrella companies in the UK – including some of the unique benefits of choosing Parasol.

1. FCSA Accreditation

The Freelancer and Contractor Services Association (FCSA) is the gold standard in umbrella company accreditation. The FCSA has a rigorous auditing process and designed its codes through consultation with HMRC. As such, you can expect only the best umbrella companies to hold accreditation. Accredited umbrellas are also audited each year to ensure they still meet the same high standards and provide the same level of service. Parasol is an FCSA-accredited umbrella company and one of the founding members of the FCSA.

2. Where are they based?

Your focus should be looking for an umbrella company based in the UK. Engaging an umbrella company from overseas runs a slightly higher risk that it could be a tax avoidance scheme. You don’t need an in-person appointment for excellent service. At Parasol, our contract workers have 24/7 access to our unique online portal, MyParasol, to download payslips, log expense claims and more.

3. Margin and take-home pay

With so many umbrella companies out there, there’s a lot of competition. As such, many umbrellas offer low margins – referred to on your payslips as the umbrella company margin. This can be an important factor, as it will impact your take-home pay. It’s also vital that you don’t determine the best umbrella company by the amount of take-home pay that’s promised. Any company offering you 80% or greater take-home pay is a red flag and suggests that tax avoidance may be at play.

4. Other fees

Again, the best umbrella companies will be transparent and upfront with you about what margin they will take. However, while a low margin might look appealing, it could be the result of additional fees, such as joining and leaving fees. These may impact your earnings in your first and last pay periods, too. 

Importantly, it’s a legal requirement that you’re provided with a Key Information Document. This document details the nature of the deductions your pay is subject to, and an estimate of your net pay – helping you to make a well-informed decision.

5. Benefits

All compliant umbrella companies will provide you with your statutory entitlements, given that workers are engaged under a contract of employment. That means you’ll always get annual leave entitlement, sick leave, and parental leave and pay. Beyond that, the best umbrella companies will also offer additional benefits or perks. Parasol Rewards is our dedicated platform that gives our contractors access to significant savings at various retailers and shops. 

6. Pension contributions

All employers must provide a workplace pension for employees, including umbrella companies. At Parasol, however, you can join our group pension scheme, or we can make our employer contributions to your existing pension provider. We also pass on the Employers’ National Insurance – something other umbrella companies don’t do. 

7. Reviews

Finally, you should also consider looking at online reviews – and speaking to other contractors in your personal and professional networks – to get an idea of the service levels that the best umbrella companies offer. Reading reviews and testimonials, as well as hearing first-hand accounts, will give you a more rounded picture of the overall service available.


So, there are many things to consider before you make a decision. Naturally, you’ll want to find the best umbrella company to manage all elements of your employment. At Parasol, we’re proud to provide a comprehensive and fully compliant umbrella solution. 

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