An umbrella company is in simple terms an outsourcing of your payroll. Rather than having the cost and hassle of setting up your own limited company you can work via an Umbrella Company.
The contractor would not be a director nor have the responsibilities associated with running a limited company. The umbrella company provider would take care of all accountancy and taxation matters and also deal with all administration matters. The contractor completes a time-sheet and forwards it to the umbrella company, who then invoices the agent. Following payment by the agent to the umbrella company, a payment is made by the umbrella company to the contractor.
A PAYE Umbrella treats all your income as salary…!!!