Umbrella companies and visas – what you need to know

Okay, so this is a little cheeky of us. We’ve recently seen a blog posted by a leading provider about umbrella companies and visas. The blog was extremely helpful, and as a result, we’ve decided to steal the content and re-write it for our readers! We’ll link to the original article, though, and we recommend you browse it too. Keep reading for answers to some of the most frequently asked questions about umbrella companies and visas.

Skilled Worker visas

Previously known as Tier 2 visas, we’re going to summarise Skilled Worker visas for you because they are frequently brought up by workers interested in using an umbrella company for UK-based employment. A Skilled Worker visa is required for overseas workers to come or stay in the UK “to do an eligible job with an approved employer“.

Umbrella companies cannot sponsor workers and help them get a Skilled Worker visa. Instead, migrants workers will need to have a Skilled Worker visa issued to them by their end-client – the company they’re working for (the employer).

Intra-company Transfer (ICT) visas

According to the UK government, an Intra-Company Transfer (ICT) visa “allows you to come to or stay in the UK to do an eligible job at your employer’s UK branch.”

There are two types of Intra-company Transfer visas:

Intra-company Transfer visa – If your employer transfers you to the United Kingdom, you will require one of these visas. However, you will only be eligible for an Intra-company Transfer visa if you have worked for your employer for over 12 months, or they will be paying you £73,900 a year (or more) while working. It’s worth noting that Intra-company Transfer visas have replaced the Tier 2 (Intra-company Transfer) Long-term Staff visa.

Intra-company Graduate Trainee visa – If you are being transferred to the UK to undertake work as part of a graduate programme for a specialist/managerial role – you’ll require an Intra-company Graduate Trainee visa. To quality, you must have worked for your employer for over three months. Like most UK visas, the Intra-company Graduate Trainee visa is new, as it has replaced the Tier 2 (Intra-company Transfer) Graduate Trainee visa.

When using an ICT visa, workers must ensure their main job is working for the organisation sponsoring the visa. The job carried out must be specified on the certificate of sponsorship. A worker with an ICT can pick up an additional role on the site – assuming it’s no more than 20 hours per week and is either the same professional at the same level or a position on the skilled worker shortage occupation list. Umbrella companies may be able to help you regarding payroll – assuming you can provide the relevant documents (identification and proof of your right to work in the UK).

With an ICT visa, workers can pick up voluntary work and study in the UK.

Spouse visas

A Spouse visa allows partners of UK citizens to image to the UK and join their partner who has “settled”. For example, a Spouse visa applies to those who hold Indefinite Leave to Remain or those with permanent right to residence. If you move to the UK with a Spouse visa, you’re entitled to study and work without restrictions. Therefore, if you were to take contract assignments, you could join an umbrella company for payroll purposes without incurring any problems.

If you have a Spouse visa, you’re allowed to have time out of the UK, for example, family visits and holidays. However, if you’re interested in taking extended time outside the UK, you may experience a few problems. We recommend you seek professional guidance from an immigration advisor.

Student visas

If you’re looking to study in the UK, you’ll require a student visa. While student visas are pretty broad when it comes to studying arrangements, the number of hours you’re allowed to work and earn money is restricted. Additional restrictions may apply when it comes to working placements and course-related international travel. If your student visa allows you to work in the UK while studying, an umbrella company may be suitable for your short-term assignments. Employers, agencies and umbrella companies would require proof of your right to work in the UK (your visa) to ensure you’re eligible for the role you’re applying for.

Using an umbrella company when working abroad

If you have taken an assignment that involves working outside the UK, you may still be able to use a UK-based umbrella company for your payroll. However, there are restrictions in place, and your umbrella company will need to follow them strictly.

Firstly, you must understand your tax liability and the domestic tax parameters that apply to the country you’re working in. For example, will you be considered a tax resident in the country you’re working, or will you be eligible for UK taxes? There is a 183-day rule to help determine the tax residency of somebody working outside the UK. The rules suggest that if you spend more than 183 days working in a single country, you become a tax resident.

Suppose a Double Taxation Treaty exists between the UK and the country you’re working in. In that case, three simple criteria would need to be satisfied for an umbrella company to process your payroll. These are:

You cannot stay in the country you are working in for longer than 183 days.
You must be employed and paid by a UK-based employer (such as an umbrella company).
Your payments cannot be recharged to an establishment your employer has in the country you’re working in.

If you’re working abroad but are being paid by an umbrella company, there are a few things you’ll need to consider. All payments your umbrella receives in a foreign currency will automatically be converted into GBP (£). Depending on the exchange rate, this could be a good or bad thing. The umbrella company will also be required to abide by UK tax law, and employees will all be paid with PAYE – HMRC’s tax system.

EU Settlement Scheme and leaving the UK

If you have already obtained pre-settled status, you’re entitled to spend up to two years outside of the UK, the Channel Islands or the Isle of Man – without any consequences (such as losing your status). However, you are required to maintain continuous residence within the five years of permission – as it cannot be expanded.

To earn continuous residence, you cannot leave the UK for more than six months in any 12 month period. Once you have earned your settled status, you can leave the UK for periods of up to five years.

Non-EU citizen but a holder of a UK visa – working remotely for your employer (sponsor)

Travelling abroad for work if you have a UK visa but are not an EU citizen could have implications. Therefore, you should speak with an immigration solicitor before arranging travel abroad. If you’re working in the UK and a non-EU/EEA or Swiss citizen, you should hold a valid UK visa – such as a Skilled Worker visa. If you have one, it is possible to travel outside the UK for business. It may also be possible to return to your overseas home to work remotely – depending on the terms of your visa and your employer’s working away from the office.

If you can work overseas, you need entry clearance or leave to remain for a period greater than six months. You also need to ensure you remain employed with your current employer (your sponsor) and cannot have an employment lapse greater than one month. It’s imperative your sponsor is happy with the work you are undertaking.

If you have been granted Indefinite Leave to Remain, the rules vary slightly. One of the conditions of Indefinite Leave to Remain is that you cannot leave the UK for a period of longer than two years. It’s imperative you also extend your visa before the expiry date if you have a time restriction. Without renewing your visa, international travel could be very problematic.

Top 10 umbrella companies

If you’ve visited our website before, you’ll know that we have a list of our top 10 umbrella companies. They’re all accredited by either the FCSA or Professional Passport, and some have special offers at the moment. Please check them out.