Frequency Asked Questions
We have compiled a list of some of the key questions you may want to ask about the scheme. The list is updated all the time, so do email us if your question doesn't appear below:
How does the new legislation regarding Managed Service Companies (MSC’s) affect me?
What is an employment services company?
An Employment Services Company or Umbrella Company allows independent contractors the opportunity to secure a contract without the need for setting up a Limited Company. Many contractors, including first-timers don't want the hassle associated with running their own Limited Company.
Who is ContractorUmbrella Ltd?
ContractorUmbrella Ltd was formed in 2002 to provide a 'hassle-free' service to UK based contractors. Our services are almost completely web-based, supported by our extensive service team, which includes accountancy, IT and administrative staff with years of experience in providing services to the contracting community. Our sister company is SJD Accountancy, a multi award winning firm that specializes in the IT contractor market.
How does ContractorUmbrella Ltd work?
It is really quite simple. You register as a temporary employee of ContractorUmbrella Ltd and we sign a contract with your agency (or end client) once you have agreed the terms. When your contract starts, you submit your timesheets and expense claims online in the temporary employee's portal. We will make payment to you each week or month that you are contracted out to an agency or client.
Does ContractorUmbrella only deal with IT contractors?
ContractorUmbrella deals with contractors from a wide variety of industries including:
- IT
- Engineering
- Financial Services & Banking
- Medical & Pharmaceutical
- Oil & Petrochemical
- Aircraft & Aerospace
- Relief Teaching
- Journalism
- Telecoms
Unfortunately we cannot help people working through CIS in the construction industry but, even if your industry is not listed above, please speak to one of our advisors to find out if we can help you.
Can ContractorUmbrella help me with a contract overseas?
If you are a UK tax resident we can usually help you for up to 183 days in any tax year before you become liable for local taxes. There are however a few exceptions to the 183 day rule so please contact one of our advisors to find out if we can help you.
What benefits does this scheme provide?
We have extensively researched what contractors expect and require from an Employment Management Company. We offer a completely 'hassle-free' solution, with no catches and no 'hidden' costs:
- Fixed weekly or monthly administration charges and no hidden costs
- Enter timesheets and expenses online We pay you each week/month that you are contracting regardless of whether we have received funds from your agency/client
- Emails are answered within 4 hours if sent during business hours
- Invoices emailed to client/agency to minimise delays
- Personal Account Manager to answer any of your questions
- Contributory pension scheme
- Mortgages, life assurance and income protection designed specifically for independent contractors
- £12.00 Same Day transfer
- You can leave whenever you wish - no additional administration charges.
Please visit our Benefits Page for more information.
You cannot now legally work in the UK without a contract of employment in some form and this carries certain responsibilities and obligations for the employer.
ContractorUmbrella enters into a legally binding contract with the agency/end client. This contract states that we will supply them with a contractor who has the necessary skills to satisfy the clients’ requirements. The agreed rate for the services performed will be paid to ContractorUmbrella over a prearranged period of time. The agency/client will choose to use a contractor rather than a permanent employee if they do not wish to assume the ‘employment rights’ that are associated with permanent employees.
ContractorUmbrella has assumed those rights and subsequently 'employ' you; therefore the requirement for a contract of employment has been fulfilled.
Your status as a contractor will not be affected and your working processes will not be altered but you will have the assurance that you are working in a manner which is completely compliant with current employment and financial legislation.
How much does your scheme cost?
We operate a very simple pay structure; our fees are fixed at £24.95 per week - £19.96 after tax relief or £79.95 per month - £63.96 after tax relief. There are no 'hidden charges’; everything is laid out in black and white in our Fees Page.
What insurances am I covered by?
Our fees cover £10 million Employers Liability and £5 million Public Liability insurance.
We have left Professional Indemnity insurance as an optional extra, rather that charge everyone for it. If your contract requires you to hold PI insurance, you can set-up cover through our Insurance Page and claim the monthly costs as an expense.
How does the new legislation regarding Managed Service Companies (MSC’s) affect me?
From April 2007 the only legal way to receive dividends is through your own personal Limited Company, over which you have complete financial and administrative control. ContractorUmbrella pays you through PAYE so you are safe in the knowledge that you are totally compliant. Please visit our MSC Closed page for more information.
Do I need to be concerned about IR35?
As An employee of ContractorUmbrella Ltd, you will not fall under IR35 rules. You will be paid via PAYE only and will not receive dividends in any form. ContractorUmbrella Ltd does not offer a Composite Scheme or Managed Limited Company.
How much money can I expect to take home?
As an employee of ContractorUmbrella Ltd you are entitled to claim Inland Revenue approved expenses that will be processed with each payment. Bear in mind that Umbrella Companies are all subject to Inland Revenue regulations and the only variance in your take home pay between each company will be as a result of their fees. To calculate how much you can expect to take home, please use our Online Calculator.
Registration is completed online - you just need to follow this link. You will then be sent an email advising you of your username, password and details of the documentation that we will require from you to complete the registration process. You will also be contacted by your Account Manager who will be there to answer any questions that you have. If you provide your Account Manager with a contact name and number for your agency/client they will contact them straight away and arrange the necessary paperwork. It really is that simple!
What happens if I do not have a P45?
If you do not have a P45 we will need to send you a P46 to complete, from this we can determine which tax code to use to process your payments.
You will receive a payment from us each week or month regardless of whether we have received funds from your agency/client.
How do I know when I've been paid?
A payslip will be emailed to you on the same morning we process a payment. This will show the net figure being transferred to your account as well as the deductions made for PAYE, national insurance and our fees. The expenses processed will also be shown on the payslip. Your homepage is updated on the same day so you can track which invoices have been paid.
When a payment is processed this is normally transferred to your account by BACS, which takes 2-3 working days to clear. You can however request a Same Day Payment transfer for a reduced bank fee of £12.00, which ensures funds hit your account the same day.
What about my VAT, PAYE and NI liabilities?
With ContractorUmbrella you no longer need to worry about any of these things. We take care of all your VAT, PAYE and NI liabilities. PAYE and NI are deducted and paid to the Inland Revenue by us. You do not need to do a thing.
Any expenses you claim must be allowed by the Inland Revenue. A more detailed explanation of how to determine which costs you will be permitted to claim as expenses can be found here.
You have our assurance that your personal details will remain entirely confidential at all times. In addition the members area is secured via SSL (Secure Socket Layer) technology, so your privacy is guaranteed. Privacy Policy.
Unlike other Umbrella Companies, all client money is held in trust. This means that the funds are protected, even if the company was to experience financial difficulty your money is held in a separate client account, which is out of reach from any creditors.
What if I decided to leave your scheme?
If for whatever reason, you decide to leave our scheme, all you need to do is tell us. We will collect all outstanding funds and make a final payment to your bank account. We will then be able to issue you with a P45. You are able to join again at any time.
What happens once I've been working at the same client site for 24 months?
When you have been at the same client's site for 24 months, or you become aware that your contracted period will extend beyond 24 months, your workplace is no longer deemed as temporary. Once you have breached the 24-month rule and you spend 40% or more of your time at the same site, you will no longer be able to claim travel between home and that place or accommodation expenses.
