Umbrella Company: A Simple Guide

Umbrella company document review

No, you do not have to be afraid.

An Umbrella company has nothing in common with Resident Evil’s Umbrella Corporation – although everyone of us feels a little bit like a zombie before the morning coffee.

In short, an Umbrella Company is an opportunity to earn a little more than PAYE, without renouncing to the benefits that PAYE entails such as sick leave, maternity leave and employment protection. An Umbrella Company is also a good solution for those who do not want to operate their own payroll and be faced with the administrative burden of running their own limited company.

How it works?

In it is simplest form, it is trilateral relationships among YouThe Umbrella CompanyThe Client.

You sign an employment contract with the Umbrella Company (you are, in fact, an employee of the Umbrella Company, not of the Client). You then perform the document review for the Client, fill you weekly timesheet with the amount of hours you worked and send it to the Umbrella Company.

The Umbrella Company invoices the Client based on the amount of hours you worked, retains a fee for the service provided to You and the Client and pays your salary. The Umbrella Company is also responsible for deducting and paying your taxes and NIC contributions to HMRC on your behalf.

The Client pays the invoice and doesn’t have to deal with the economical and legal requirements that a salaried employee would entail.

Why is better than PAYE?

The advantage for you is that – subject to certain tests and exceptions– you will be able to claim work-related expenses like food, travel, mileage and accommodation.

You will have to keep a receipt for any expenses you incur as part of your job, uploading (or posting) them to the company’s system and the company will then reimburse you.

The combination of the salary paid by the Umbrella Company plus the reimbursed expenses – and minus the Umbrella’s fees – is normally higher than the standard PAYE salary you would have earned if you had been employed directly by the Client.

Is this is legal?

The answer is Yes. Offering professional services via a third party entity – rather than contracting directly with the client – is allowed in UK.

However, it is important to remember that only certain expenses can be reimbursed and within specific parameters defined by the law. Be mindful of small outfits that boast a very high take home pay promising to reimburse all your expenses, as they may not be fully compliant with the current regulations.

In addition to that, check the amount of the weekly or monthly Umbrella Company’s fee and what level of service and benefits you will be entitled to, as this will have a direct impact on the amount of money you will receive for your document review services.

Document review salaries: How much can you make as a document reviewer?

document review salariesIt is not really easy to estimate the document review salaries as several variables will influence the take home pay.

For instance some of these will include:

  • Your experience and qualifications;
  • The languages you speak;
  • If you’re working through an agency or independently;
  • How you will be taxed (PAYE, Umbrella, Limited as explained here).

As a general rule the rate for an entry level document review job for a qualified lawyer will span from 15 £ to 18 £ per hour.

A very experienced document review lawyer contracting directly with the client for a document review project in a foreign language will be offered an extremely competitive rate, up to 50 £ per hour.

Other details will influence the total take home pay and it’s worth clarifying them before accepting a proposal:

Overtime: always ask if overtime will be available, and if so what the rate will be. Some projects will require you to work 40 hours per week, but sometimes your client will ask you to work over the 40 hours limit, possibly including weekends. Projects with overtime are highly desirable, as it can be paid up to twice the standard hourly rate.

Project duration and possible extensions: needless to say- the longer you work, the more you get paid!

Language requirements: the document review job market is ruled by supply and demand, as any other market. If you can supply a product (your language skills in this instance) that is scarcely available, the market will probably be willing to pay you a premium. We’ve recently seen exceptional rates for Mandarin and German speakers.

Qualifications: document reviewers can be divided in 4 main categories, based on the rates they will be get paid 1. Paralegals (i.e. non- qualified lawyers);  2. Non – EU Foreign qualified lawyers; 3. EU qualified lawyers; 4.Qualified Lawyers in England and Wales (often includes Lawyers qualified in other Common Law jurisdictions such as Australia, New Zealand, US and South Africa).

Notice period: during your assignment you may be offered another project at a better rate or with improved conditions – it’s better to be sure what notice you will have to give before you can join the other project.

Finally remember that the rates are always gross, meaning that depending on your circumstances you will have to deduct taxes and NIN. If you want to know more about taxation, read the full article here.

PAYE, Umbrella Company or Limited Company?

PAYE, Umbrella Company or Limited Company

How do you want to be paid: PAYE, Umbrella Company or Limited Company?

Most of the times you will be asked this question for the first time during the interview process.

If these terms do not ring any bell, it is worth keep reading this article.

Getting paid is always a very important part of the job. How and how much are equally fundamental questions.

In the UK, document reviewers can be potentially paid via the 3 different methods outlined above. The first one is called Paid As You Earn (PAYE).

PAYE is the default system that employers need to follow when paying employees. Like in many other countries, your employer has to deduct income tax and national insurance contributions directly from your salary and pay the tax man (HMRC in the UK) on your behalf.


The good thing is that you – employee – do not need to do anything apart form cashing the paycheck. The less good thing is that you could probably earn more doing the same job and asking to be paid via an umbrella company or a limited company instead.

In the second option, in fact, you are not qualified as an employee of the company you are reviewing for, but as an employee of a different company (the Umbrella Company). Your formal employer is the Umbrella Company, who pays you following the PAYE principles and then invoices the client for the number of hours you worked on a specific project.

The difference is that, by working for an Umbrella Company, you will be able to claim, with some variations, travel and food expenses, accommodation and other expenses you incur while working on an assignments. This way you will bring home a higher salary compared to the simple PAYE.

As this is perfectly legal it would be a pity not to take advantage of that.

The third option is setting up a limited company (LTD) and invoice directly the client for the hours you work.

The LTD company is 100% owned by you (you are the only shareholder) and you also are the sole director. Offering your professional services via a LTD company grants you a huge tax cut because dividends are not subject to national insurance contributions. We will analyse in detail the pros and cons of a limited company but it is important to know that you should check with your accountant and with the HMRC if any of your assignments falls within the blanket of IR35. In this case you may be liable to pay taxes as if you were an employee of your client instead of a supplier.