Summary of changes from April 2007
The Government has deemed that, in order to be fully compliant with current and future legislation, Umbrella Companies must become employer to all of its members. Recent legislation, introduced by the Government to counter tax avoidance, has brought into question the legality of contractors claiming expenses through Umbrella Companies but this won’t apply to contractors working as an employee through an Umbrella Company.
Therefore, in order to give our customers a fully compliant and beneficial service we will be changing the structure of ContractorUmbrella to coincide with the start of the new tax year on 6th April 2007. From this date you will become a flexible employee of ContractorUmbrella with all the employment rights that this entails; you will not be required to do any more than you do now and, despite the additional workload created for us by these Government changes we will not be increasing our fees.
The best news from your point of view is that even if we haven't received funds from your agency/client you will be guaranteed a weekly or monthly payment from us.
Weekly paid contractors will receive one payment every Thursday whilst on contract. If we have not received funds from your agency before mid-day on Tuesday, your payment will consist of the minimum wage of £5.52 for each hour that you worked in the previous week; if we do receive funds from your agency/client we will process those funds for you on Thursday instead of a minimum wage payment.
Monthly paid contractors will have their payments processed either mid-month or month end dependant on when funds are received from the agency/client. In order for payments to be included on the mid-month payroll we will need to have received funds from your agency/client 2 days before the mid-month payroll processing dates. If funds are received after the above deadline dates but by the 3rd working day before the month end, payment will be processed on the last working day of the month. If we have not received funds from your agency by the 3rd working day before the month end, your payment will consist of the minimum wage of £5.52 for each hour that you worked in the previous month.
If we have not received funds for you by the above deadlines we will process a minimum wage payment for you. However, in order to do this we must have a record of your hours/days worked in the previous period. Therefore please ensure that weekly timesheets are submitted by close of business on Tuesday and monthly timesheets are submitted at least 3 working days before the month end.
Please could we ask that weekly paid contractors request a CHAPS transfer by midday Tuesday each week and monthly paid contractors at least 3 working days before the month end. Unfortunately if CHAPS requests come after these deadlines we will be unable to make a same day transfer that week/month.
In order to comply with UK and EEC Employment Law we will deduct a small amount each week/month for holiday pay. This will be based on the mandatory 24 days holiday per year. The deduction will be pro-rated and based on a minimum wage payment. The deduction will be just over £19 for weekly paid contractors and just under £85 for monthly contractors. Obviously this means that you will have a fund available to you if you wish to take any holiday during the year.
We realise that the Government's actions will mean a change for all of you but there are many benefits to you, not least the security of employment. If you should have any questions your Account Manager will be pleased to help you.
