Locum vets: should I work with an umbrella?

Are you a locum vet wondering whether working under an umbrella company is the right decision for you? Well, you’ve come to the right place! Carry on reading to learn more about the realities of the umbrella world, including the pros and cons so you can make an informed decision. 

What is an umbrella company? 

An umbrella company is essentially a payroll service which acts as the middleman between contractual or part-time employees and their end clients. This means once you join an umbrella company, you become their full-time employee. 

Benefits of working with an umbrella company:

1. Ease of administration: An umbrella company takes care of administrative tasks such as invoicing, tax calculations, and national insurance contributions on your behalf. This can save you time and effort, allowing you to focus more on your veterinary work.

2. Employment benefits: As an umbrella company employee, you may be eligible for certain employment benefits, such as statutory sick pay, maternity/paternity pay, and holiday pay. These benefits can provide you with financial security during periods of illness or when you need time off. Plus, you’ll automatically be granted a continuity of employment status which makes things like getting a mortgage a lot easier!

3. Networking opportunities: Working with an umbrella company may give you access to a network of other locum professionals, including vets and veterinary clinics. This can lead to networking opportunities and potential collaborations, helping you expand your professional connections.

Cons of working with an umbrella company 

1. Reduced take-home pay: Although an umbrella company can provide administrative support and help with tax efficiency, their services come at a cost. You may have to pay fees or a percentage of your earnings to the umbrella company, which can reduce your overall take-home pay compared to working as a self-employed locum.

2. Tax avoidance schemes: Unfortunately tax avoidance is very common in the world of umbrella companies. That’s why it’s important to do your research before agreeing to work with an umbrella. A good sign the provider is legitimate is if they are accredited by Professional Passport or FCSA. 

Red flags to look out for include: take-home pay that is too good to be true (it probably is), any mention that they are ‘HMRC approved’ (this doesn’t exist) and if they are extremely difficult to contact (usually means they are operating offshore/from a tax haven). 

3. Lack of control: While it might be great that your umbrella provider is sorting out your tax deductions, this also means you have very little say when it comes to your finances as you will only receive your pay after all relevant deductions have been made. Additionally, some umbrellas may not always pay you on schedule due to having a number of clients. 

Overall, it is a personal decision as to whether working through an umbrella company is the right choice for you and your needs. We hope you come away from reading this blog feeling more informed about the pros and cons of using a brolly so you can make an informed and confident decision. 

Fancy a new challenge? Check out our latest veterinary vacancies here or get in touch with the team today on 0203 9784 104.