Umbrella companies offer an easy way for freelancers and contractors to get paid without running a limited company. They handle payroll and tax via PAYE, ensuring compliance and employment rights. But are they the right choice for you? Consider the pros and cons.

Essentially, an umbrella company acts as an intermediary between the worker and the end client (or recruitment agency), handling payroll, taxes, and other administrative tasks on behalf of the worker.

The worker enters into a contract with the umbrella company. In most cases, the umbrella company employs the worker and pays their wages through PAYE. The umbrella company then enters into a separate contract with the client or recruitment agency who requires the worker's services.

As an employee of an umbrella company, a worker has the same employment rights as other employees including the right to a written employment contract.

There are many advantages to using an umbrella company, this can include simplifying tax obligations, employee rights and IR35 compliance. Some of the disadvantages can include the costs of using the umbrella company, limited control and the overall tax burden may be higher compared to other structures that may be available.

Private pensions can be a great way to pass on wealth, but tax implications depend on the age of the deceased and the type of pension. Some beneficiaries may receive funds tax-free, while others could face significant tax charges. Knowing the rules is essential.

Private pensions can be an effective means of passing on wealth, but it is crucial to consider the potential tax implications when inheriting a private pension. Typically, the individual who passed away will have nominated the beneficiary by informing their pension provider of their wish for the remaining funds in the pension pot to be inherited by you. If the nominated beneficiary cannot be located or has since passed away, the pension provider may make alternative arrangements and direct the funds to someone else.

In general, if you inherit a private pension from someone who died before the age of 75, the benefits remaining in the pension can be paid out as a lump sum or drawdown income without any tax liability. However, if the pension holder passed away after the age of 75, the inherited pension will be subject to taxation at your marginal income tax rate. This means you would pay 20% tax if you are a basic rate taxpayer, 40% if you are in the higher tax bracket, or 45% if you are taxed at the top rate. Note that tax rates may differ for Scottish taxpayers.

For pensions from a defined benefit scheme, typically associated with workplace pensions, there are additional restrictions. In most cases, the pension can only be paid to a dependant of the deceased, such as a spouse, civil partner, or a child under the age of 23. If the pension scheme permits, this rule may be adjusted, but any inheritance under such circumstances may be subject to a tax charge of up to 55% as an unauthorised payment.

The rules governing pension inheritance are complex, varying depending on the type of pension and the age of the deceased at the time of death. Furthermore, there are strict time limits that must be adhered to in order to ensure compliance.

When someone dies, their personal representative (executor or administrator) must value their estate to determine if Inheritance Tax (IHT) is due. This involves assessing assets, debts, and handling tax obligations throughout the estate’s administration period.

In order to ascertain whether or not IHT is due, the personal representative (an executor or administrator) of the deceased must value the deceased’s estate. This is done by calculating the total value of the assets and gifts of the deceased and deducting any debts.

However, the personal representative is also responsible for the assets from the date of death until the date everything has been passed on to the beneficiaries. This is known as the ‘administration period’. This may also include having to apply for probate.

There are also other tax chores that are required that include:

• paying any unpaid bills
• paying any unpaid personal taxes
• applying for tax refunds
• filling a self-assessment return for income the person earned before they died if needed
• repaying any overpaid benefits

If necessary, the personal representative also needs to pay tax on any new income the estate generates after the person has died and finally pay any IHT that is due.

1 March 2025 – Due date for Corporation Tax due for the year ended 31 May 2024.

2 March 2025 – Self-Assessment tax for 2023-24 paid after this date will incur a 5% surcharge unless liabilities are cleared by 1 April 2025, or an agreement has been reached with HMRC under their time to pay facility by the same date.

19 March 2025 – PAYE and NIC deductions due for month ended 5 March 2025 (If you pay your tax electronically the due date is 22 March 2025).

19 March 2025 – Filing deadline for the CIS300 monthly return for the month ended 5 March 2025.

19 March 2025 – CIS tax deducted for the month ended 5 March 2025 is payable by today.

1 April 2025 – Due date for corporation tax due for the year ended 30 June 2024.

19 April 2025 – PAYE and NIC deductions due for month ended 5 April 2025. (If you pay your tax electronically the due date is 22 April 2025).

19 April 2025 – Filing deadline for the CIS300 monthly return for the month ended 5 April 2025.

19 April 2025 – CIS tax deducted for the month ended 5 April 2025 is payable by today.

30 April 2025 – 2023-24 tax returns filed after this date will be subject to an additional £10 per day late filing penalty for a maximum of 90 days.

Cash flow is the backbone of any small business, yet late payments continue to be a major challenge for entrepreneurs across the UK. According to the Federation of Small Businesses (FSB), around 50,000 businesses close annually due to cash flow problems caused by overdue invoices. To help combat this issue, the UK government has set up the Small Business Commissioner (SBC) to support businesses in tackling late payment disputes and improving payment practices.

Why Late Payments Are a Problem

Late payments can cause severe disruptions to business operations, affecting your ability to pay employees, invest in growth, and maintain supplier relationships. Delays in receiving funds can lead to increased borrowing, higher interest payments, and unnecessary stress for business owners. Worse still, chasing unpaid invoices can be time-consuming and frustrating.

How the Small Business Commissioner Can Help

The SBC is an independent public body that provides free support and advice to small businesses dealing with late payment issues. Services include:

• Advisory Services – Guidance on how to prevent and manage late payments.
• Complaint Resolution – Assisting small businesses in resolving disputes with larger firms over unpaid invoices.
• Webinars and Educational Resources – Free workshops, webinars, and guidance on improving payment practices.

Practical Steps to Avoid Late Payments

To protect your business from cash flow disruptions caused by late payments, consider these strategies:

1. Set Clear Payment Terms – Ensure that all contracts specify payment deadlines, late payment penalties, and accepted payment methods.
2. Invoice Promptly – Send invoices as soon as work is completed, or goods are delivered and follow up promptly.
3. Use Digital Invoicing and Payment Tracking – Tools like QuickBooks, Xero, or Sage can automate reminders and track payments efficiently.
4. Charge Late Payment Interest – Under the Late Payment of Commercial Debts Act, businesses can charge interest on overdue payments.
5. Seek Mediation or Legal Action – If payment disputes escalate, consider mediation through the SBC or taking legal action.

By implementing proactive measures and utilising available support, small businesses can reduce the impact of late payments and maintain a stable financial position.