Agency PAYE
Similar to the way things work with an umbrella company, this option also involves a middleman; in this case, a recruitment agency.
While they pay you and sort out your tax and National Insurance contributions on a Pay As You Earn (PAYE) basis, like an umbrella company, there are significant differences. You’re not employed by the agency, so you may not have employment rights such as Statutory Sick Pay (SSP). You don’t pay for the service, but you can’t claim expenses. You can offload your paperwork, so it’s hassle free in that respect, but you may end up having to change agency with each new contract. The service isn’t always offered by recruitment agencies and, where it is, it’s usually geared more towards temporary positions, such as secretarial or bar work.
Good choice if:
- You’re looking for occasional temp work, such as secretarial or bar work
- You’re not interested in the financial benefits of going it alone
- You want someone else to sort out your tax and National Insurance without having to think about it
Not so good if:
- You don’t want to be tied to one agency
- You change contracts frequently
- You want to maximise your income and claim expenses
- You earn over £35,000
