Registering with an umbrella company is straightforward and can be completed in no more than 15 minutes. However, you will be required to share a lot of personal information and sign and return a contract of employment. This blog breaks down the umbrella company registration process and discusses how you change from one umbrella company to another.
Registering with an umbrella company is easy, but there are numerous steps that you need to follow before you officially become an employee of the new provider.
1) Identify a few umbrella companies you’re interested in joining
Don’t rush into joining a new umbrella company. You must conduct thorough due diligence when searching for a new payroll provider to ensure they are fully compliant with HMRC’s rules and regulations and will provide you with a reliable and efficient service. We recommend you identify a handful of potential umbrella companies and ensure they have a professional accreditation from the Freelancer and Contractor Services Association (FCSA) or Professional Passport (please visit our top 10 umbrella companies).
2) Request a take-home pay calculation from each
When you have found a few umbrella companies you’re interested in joining, ask each of them to provide you with a free, tailored take-home pay calculation. When you are presented with your calculations, check them thoroughly to ensure the umbrella processes your pay with HMRC’s tax system – Pay As You Earn (PAYE), and there are no suspicious deductions.
3) Choose the umbrella company you want to join and reach out to them
Once you have selected the umbrella company you want to join, contact them and let them know your desire to register with them.
4) Complete the initial registration process
You will need to provide your new umbrella company with several pieces of personal information, including full name, address, date of birth, contact information, NI number, assignment details, bank details, and more. The umbrella legally requires this information.
5) Send proof of identification and right to work (RTW) in the UK
Once you have provided your personal information, your umbrella will require proof of your identification and right to work (RTW) in the UK (if you are not a UK national).
Proof of identification – most umbrella companies will require a photograph or photocopy of a British or Irish passport, or a Settled Status 9 Digit Share Code.
Right to work (RTW) – Settled Status 9 Digit Share Code. After the 30th June 2021, umbrella companies are no longer allowed to accept EU/EAA passports as proof of right to work in the UK.
6) Read the contract of employment carefully
Before you become an employee of your new umbrella company and can be legally paid, you will be sent a contract of employment. It’s imperative you read this thoroughly and only sign and return it if you’re entirely satisfied with all of its content. Don’t hesitate to ask the umbrella company if you have any questions or concerns.
7) Complete the registration process with your new umbrella
Once you have signed and returned the umbrella company’s contract of employment, you will officially become an employee of theirs and will be read to get paid.
New umbrella company checklist
The umbrella company you decide to use for your payroll should be your own. Never feel pressured into registering with a company you’re uncomfortable with, or suspect is acting unlawfully. Here is a quick checklist of things to consider before registering with an umbrella company:
- Make sure they act compliantly and request a take-home pay calculation (and Key Information Document if working via a recruitment agency).
- Choose an umbrella company with a professional accreditation from the FCSA or Professional Passport.
- Check online reviews to ensure the umbrella you’re joining provides a good level of service.
- Make sure the company has an established trading history.
- Review the service the umbrella provides. For example, do they provide extras such as comprehensive insurance, Same Day Faster Payments, and more.
- How does the umbrella company’s margin compare to the competition? Most umbrella companies have a weekly margin between £15 and £30.
- Check the helpful online resources provided by the government to ensure the umbrellas you’re looking at are compliant:
Changing umbrella companies is easy
If you’re unhappy with your current umbrella or suspect they’re acting unethically (perhaps facilitating tax avoidance), you should immediately transfer to another. The process of swapping from one umbrella to another is easy. All you need to do is let your current umbrella know you’re leaving and request a P45 document. You will then be required to complete the registration process with your newly chosen umbrella company. Don’t forget to conduct thorough due diligence to ensure that your new payroll provider complies with HMRC’s rules and regulations. It’s a good idea only to consider joining umbrellas with an FCSA or Professional Passport accreditation.
Top 10 umbrella companies
If you’re looking for a new umbrella company, we have just the resource for you. We have compiled a list of our top 10 umbrella companies accredited by the FCSA or Professional Passport. Please check them out because some have special offers at the moment.
