What Is a Reputable Umbrella Company?

An Umbrella Company is simply a company that is structured to employ temporary agency workers permanently to work at a variety of temporary workplaces, stating in the workers contract that their permanent place of work is their home where they carry out the duties of finding work and keeping records of expenses incurred and contract assignments. The Umbrella employee should be able to claim a tax free amount each week of 瞿3 for the use of their home for an office. The benefit of this employment structure is that (mostly) travel related expenses from home to temporary workplace can be claimed as well as temporary accommodation and incidentals like replacement tools and a certain amount of subsistence. The expenses are taken from the gross receipt (the amount you would have been paid as gross salary if employed directly by an employment agency) and after being subtracted whatever is left is taxed as gross salary. It should be stated in the "overarching" employment contract that the workers salary is variable for this reason, but will never be less than the national minimum wage (NMW). Once the salary is taxed the net pay is then added to the tax free expense amount and paid to you. There is usually a fee or "margin" that is taken from the gross receipt as the Umbrella Company is in business to make money. Different Umbrella Companies have different "margin" rates; you would need to enquire with them at the time you sign up. Some companies quote gross fees and some quote net fees.

At the end of each working week you let the Umbrella Company know where you have been working, the name of the client (agency or contractor) and the hours and rates at which you agreed to carry out the work. The Umbrella Company will invoice your client (agency), collect the money, and when you have submitted your work related expenses they will calculate your pay and transfer it to you.

A well structured Umbrella Company will cover you under their employers and public liability insurance, give you access to a pension and cover all of your statutory rights like Statutory Sick Pay (SSP), Maternity and Paternity Pay and paid holidays. The most compliant Umbrella Company's will take their responsibility so seriously that they will provide you with an employee handbook which should outline their Diversity and Equal Opportunities policy as well as give you guidance on their disciplinary and grievance procedure.