WHAT IS AN UMBRELLA COMPANY?
An umbrella company is a fully compliant payment intermediary which acts as an employer to contractors who work on various temporary assignments.
This provides contractors with a continuous period of employment whilst having the flexibility to work on many assignments with different clients.
The umbrella company will make PAYE tax and National Insurance deductions ensuring your candidate’s income tax affairs are taken care of.
HOW UMBRELLA COMPANIES WORK
- The umbrella company will act as your employer whilst you work on temporary assignments.
- They deal with your paperwork and administration, providing you with a contract of employment and information on each temporary assignment you undertake.
- The umbrella company will enter into a contract with each agency/client you work on an assignment for.
- The client you are working for will record your hours worked, usually via a timesheet, and will confirm these with the umbrella company.
- The umbrella company invoice the client on your behalf for the services you have performed.
- The umbrella company receives payment from the client and pays you for the hours worked under the terms of your contract.
- You will receive a payslip showing all income and deductions, from the umbrella company being paid by the agency/client through to the net amount being paid into your account.
Want to join Bishopsgate Contracting Solutions umbrella? Sign up below or request a callback.
BISHOPSGATE UMBRELLA BENEFITS
Benefits of Bishopsgate Umbrella for Contractors:
- Statutory benefits such as holiday pay, sick pay and a pension
- One employer with the benefits of continuous employment
- Ability to claim work-related expenses (dependent on SDC status)
- Comprehensive insurance cover
- Payslips and SMS notifications detailing payment and relevant deductions
- Employee status which assists with life planning such as obtaining a mortgage
- Access to online candidate portal
Benefits of Bishopsgate Umbrella for Agencies:
- Decreased time and cost spent on payroll by outsourcing labour
- Compliance with AWR, auto-enrolment, MSC legislation and IR35
- Right to work checks completed
- Removes administration associated with employing workers directly, allowing time and money to be spent on growing your business
- Comprehensive insurance cover for the subcontractors
- UK based call centre
- Access to client portal
- Candidate SMS payment alerts
- Dedicated Account Manager
- Rebate Scheme (subject to qualification)
- Competitive industry rates
Travel and Subsistence Legislation
As of 6th April 2016, any worker that is employed by an umbrella company is no longer eligible to claim home to work travel and subsistence expenses if they are under the supervision, direction or control of the end client, or are essentially working inside IR35. The change comes due to attempts made by HMRC to clamp down on the incorrect use of overarching contracts of employment being utilised by umbrella companies, which enables workers to claim home to work expenses, a luxury not afforded to permanent workers. The benefit has been deemed unfair and as such, restricted to those who are not under any form of supervision, direction or control.
Supervision, Direction and Control (SDC)
In order to determine whether a contractor is able to claim home to work travel and subsistence expenses, it is important to understand the meaning of 'supervision, direction or control -"SDC"'. Whilst there is no legal definition of the meaning of SDC and no case law to look to, HMRC have provided guidance and examples on this area, and the terms should be looked at in their "normal" meaning.
This will be evident where it is necessary for the worker to be watched or overlooked whilst they are completing work, to ensure it is done correctly. Supervision can also be demonstrated by an assistance with developing skills and knowledge.
If a worker is told that they must do their work in a certain way, then they will be deemed to be under direction. If the project is coordinated for the worker and instruction and guidance is given, they will fall foul of the SDC rules.
Control over a worker is present if there is a right to move them from one job to another. Control can also be seen as a worker being told to change how they are carrying out the job
If just one (not all) of the above is evident, then the worker will be caught by the section 339 of the Income Tax (Earnings & Pensions) Act and will not be eligible to claim home to work expenses. These views are however, open to a degree of interpretation.
REGISTER FOR BISHOPSGATE UMBRELLA SERVICES
Registering with Bishopsgate on our umbrella PAYE scheme is a quick and simple process.
You have two options: you can complete the ‘Sign up in seconds form’ on our website and a customer service representative will be in contact with you to confirm your details.
Alternatively, you can call us on 0203 019 4990 to speak to one of our customer service team; they will be able to get you registered in no time.
Before we can make payment to you, we will require your Right to Work documents as well as your signed contract.
Finally, once we have this, you’re fully registered and ready to be paid.
If you’re a contractor in the construction industry, take a look at our Construction Industry Scheme (CIS) page.