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.

Umbrella companies were spawned following the introduction of IR35 back in April 2000 and became hugely popular after the Management Service Company Legislation in April 2007. They are seen as one of the last remaining 'compliant' payroll methods, taxing contractors fully under PAYE, after the deduction of allowable business expenses.

If you've just decided to start contracting you probably don't know what questions you should be asking.