Umbrella companies provide contractors and freelancers with the peace of mind and protections associated with being an employee, as opposed to being self-employed. They also impart a degree of financial and contractual stability to the worker and help to ensure that both employment and taxation legislation is adhered to.
With increasing numbers of workers fulfilling contract and freelance roles, often working via recruitment agencies, many have turned to using umbrella company services as an alternative to a personal service company (their own limited company) or traditional self-employment.
Most umbrella companies charge what we would describe as a “high” fee for provision of basic employment and payroll services, often comparable with the running costs of personal service [limited] companies; so that’s around £20 per week.
The Transparent Umbrella Company will save workers about 75% on fees. We charge a maximum of just £5 per week or £1 per shift, no matter what, making us far cheaper than many other umbrella companies and limited company accountancy services. We believe that as a contract worker, you should be able to keep more of the money you earn.
Find out more about how the Transparent Umbrella Company can provide you with faster and cheaper umbrella company services.
Call Us – 0203 880 6776
Email Us – info@transparentumbrella.co.uk
What is an Umbrella Company?
An umbrella company acts as the legal employer of the worker as well as the service provider to the recruitment agency (or client if there is no agency). Umbrella companies have increased in popularity in recent times as they remove the burden of having to run a limited company or register as self-employed.
The umbrella company takes care of administrative and contractual responsibilities, allowing workers to concentrate on providing the service to the end-hirer, but as an employee of the umbrella and not of the client (hirer). As the umbrella is the “employer of record”, the client (hirer) will not be at risk of the worker being considered a “disguised employee”. The legislation around disguised employment (or false self-employment) is also known as IR35.
Depending on the time-sheeting regime of your agency and end-client, using an umbrella can sometimes entail submitting timesheets to the umbrella company, who will then exchange data and possibly invoices with the agency to procure funds in a timely manner.
Umbrella companies play an important role in the collection of employment taxes, provision of pension contributions and in meeting obligations around IR35 and other tax compliance matters, both for employer and employee. Other legislative touch points include the Agency Workers Regulations and the Working Time Directive.
What are the Benefits of using an Umbrella Company?
There are a range of benefits to be enjoyed when working through the Transparent Umbrella Company:
- Simplicity and Ease of Use – Using an umbrella company is straightforward and you can get up and running in a few easy steps. There are no lengthy applications, no joining or leaving fees. It’s really just about employment and payroll, being properly insured for your role and addressing your statutory rights.
- Taxes and Contributions – We take care of all employment related tax and National Insurance requirements, including filing daily electronic returns with HMRC, so that your personal tax code is kept as up-to-date as possible.
- Less Paperwork – Running your own limited company entails a lot of paperwork and administration. As part of our umbrella service, we take care of all of this for you, allowing you to spend more time earning and less time worrying about administration.
- Regulatory Compliance – Umbrella companies are set-up to comply with various rules, regulations and enacted legislation, some of which just apply to “agency workers”, and some that is specific to the public sector.
- Contractor Insurances – We are also able to provide the necessary insurances and protections for all who work through us. This will normally include professional indemnity, public liability and employer liability, copies of which are provided to your agency.
Making Contracting Easy
We understand the unique challenges of contracting and we know that being traditionally self-employed is not for everyone. By utilising our umbrella services, you can undertake your professional work without the stresses that come with traditional freelancing. As a contractor umbrella company, our fees are generally far lower than other umbrella companies, making us the ideal solution for your next contract role.
About Umbrella Company Fees & Employer National Insurance
Most umbrella companies base their fee (or company margin) on either a weekly flat rate, though some still charge a percentage of gross earnings.
The fee (or company margin) is deducted from your invoice value (that’s your hourly rate x hours) along with the Employer National Insurance component, to establish your Gross Pay for Tax. This is the number that is run through the Umbrella’s PAYE system to produce your take-home pay.
Your agency uplifts your hourly rate to include the Employer National Insurance that the umbrella (as employer) needs to pay. The same is true of Apprenticeship Levy. If you want to know your “real hourly rate”, then ask your agency for your PAYE rate. Both rates (umbrella and PAYE) work out the same, it’s just that the umbrella pay rate has an extra component, which is necessary when your employment is outsourced to an umbrella.
The Transparent Umbrella Company charges as little as £1 per time-sheet or a maximum of £5 per week (that’s a saving of 75% on most umbrella). This means that you will never have to pay more than £5 per week, making us a much more affordable and arguably fairer option.
All workers with Transparent Umbrella Company are employed under what is known as an Overarching Contract of Employment, with all the usual employment rights (like any other employee in the United Kingdom). No joining fee. No leaving fee.
The Only UK Umbrella Company Providing 100% Tax Assurance
Transparent Umbrella Company is the only UK umbrella company able to provide real-time visibility of all employment taxes paid and therefore total tax assurance to all parties. This means that both the hiring end-client and recruitment agency can validate instantly if employment taxes have been levied and paid at the correct rates. This immediately mitigates any potential liability to criminal prosecution under the Criminal Finance Act.
Safeguarding Recruitment Agencies Against Prosecution Under the Criminal Finance Act
The onus is now on recruitment agencies and public-sector hirers to ensure that the PAYE regime has been applied to workers’ payments, reflecting both the spirit and letter of the legislation. Transparent Umbrella Company’s software architecture and improved business processes enables agencies and clients to instantly validate taxes paid.
This matters because the current trust-based retrospective payroll reporting by traditional umbrella companies is open to both accidental and explicit abuse, and requires expensive and manual retrospective data checking on all sides.
Driving Down Tax Compliance Costs for Recruitment Agencies
Agencies that recommend Transparent Umbrella Company to their temporary workers can randomly check any payslip in real time, removing the need to check payslips retrospectively.
This change in the cost and integrity of compliance means that recruiters can actively seek more “off-payroll” public-sector business (inside IR35) with an ability to provide public sector hirers with the tax assurance they require.
Tax Transparency Technology Benefits for Workers
The same technology that allows recruitment agency directors to be sure that they and their organisation are not enabling tax avoidance in the supply chain, also means that workers are able to get faster and more accurate data/information about their paid and unpaid time.
Another benefit of transparency is that Transparent Umbrella Company does not pay rewards to agencies for processing worker payroll. This keeps the tripartite relationship between agency, umbrella and worker “honest”, with workers sure that none of their time-sheet value; either directly or indirectly, is ever paid to the agency as a reward, meaning that there is no risk of any party contravening the Bribery Act.
Try the UK’s Best Umbrella Company Today
Contact us and sign up today to start enjoying the various benefits and advantages of working through Transparent Umbrella Company. We could save you up to 75% on fees compared to other umbrella companies and we never charge more than £5 per week, allowing you to potentially save hundreds, even thousands of Pounds every year.
Call Us – 0203 880 6776
Email Us – info@transparentumbrella.co.uk