What to do When your Umbrella Company Closes Down

Facing Umbrella Company Closure? Here’s What to Do Next

Hey there! If you’ve just discovered your umbrella company is closing down, it’s natural to feel anxious or even a bit lost. But don’t worry—you’re not alone, and there are clear steps you can take to protect your finances and keep your contracting career on track.

Let’s walk through what you need, what actions to take, and how to handle any bumps along the way.

Gather Up These Essentials

Before diving in, make sure you have the following at hand:

• Your most recent payslips
• P45 or P60 (if provided)
• Contracts and assignment letters
• Recent correspondence from your umbrella company
• Bank statements for incoming payments
• HMRC personal tax login details

These materials will help you prove your income, track outstanding payments, and sort out your tax situation.

Step-by-Step: What Contractors Should Do

Let’s break it down together:

1. Contact Your Agency or End Client

• Let them know about the closure as soon as possible.
• Ask about backup payroll arrangements—agencies often have trusted alternatives.
2. Check for Outstanding Payments
• Are you owed money from your umbrella company? Review your payslips and contract.
• Contact the umbrella’s insolvency practitioner (if appointed) for updates.
3. Secure Employment Records
• Download or request all payslips, P45s, P60s, and other documentation.
4. Sign Up With a New Umbrella (or Go Limited)
• Research replacement umbrella companies. Look for providers with a reputable history.
• Alternatively, explore setting up your own limited company.
5. Sort Out Tax and Benefits
• Inform HMRC if you experience a gap in employment.
• Explore Universal Credit or support if your pay is paused.

Sticking Points and How to Solve Them

Even the smoothest transition can hit a few roadblocks. Here’s what contractors often face (and what to try):
• Missing Final Payment?
Contact the appointed insolvency practitioner or seek advice from Citizens Advice.
• Unclear Tax Status?
Log in to your HMRC personal tax portal. Double-check your employment history and make sure you aren’t on an emergency tax code with your new payroll.
• Confused About Your Options?
Reach out to umbrella comparison services or your agency for recommendations. They usually know reputable options.
• Employer’s Reference for Mortgages or Loans:

Retrieve documents before the company officially shuts down, just in case you need proof for lenders.

Ready for a Fresh Start?

Switching umbrella companies can be a hassle, but it’s also a chance to evaluate your working arrangements. If you’re unsure what comes next, seek professional financial advice. And remember: keep a clear record of everything during the switch.

Let’s keep your contract career moving forward, even if your umbrella company isn’t. You’ve got this!