Salary sacrifice is an agreement to reduce your salary, and in return, your employer will give you a non-cash benefit, such as an increased contribution to your pension. Salary sacrifice is beneficial if you have an existing pension scheme in place to which you would like to continue making contributions or to make more significant contributions towards your pension.

Faster payments is a service that allows the transfer of funds in minutes or hours rather than days. Most umbrella companies will have a deadline for which they can accept funds from your recruitment agency or end client to ensure they can process the tax deductions and pay you the same day.

A Scheme Reference Number (SRN) is a number that HMRC allocates to a tax avoidance scheme either after the scheme is disclosed to them or when they reasonably suspect a scheme is notifiable. The allocation of an SRN allows HMRC to identify and track users of tax avoidance schemes.

A self-billing arrangement is a formal agreement between a recruitment agency and an umbrella company. On the day you are due to be paid, your agency will send the funds and a breakdown of the hours you have worked to your umbrella company. The umbrella company will then process the tax deductions and make a net payment to you.

Solutio is a cloud and app-based payroll software platform designed to help umbrella companies and recruitment agencies. Solutio streamlines the payroll process by aligning all transactions from each supply chain entity, including client, agency and worker.

If you do not have a P45, you can complete a Starter Checklist for PAYE. The Starter Checklist for PAYE will provide your new employer with all the information required to complete your payroll and ensure you are placed on the correct tax code.

Supervision, Direction and Control (SDC) was enacted on the 6th April 2016. SDC rules were put in place to ensure contractors operating similarly to permanent employees (i.e. subject to SDC) cannot receive tax relief on expenses incurred during work. The definitions for SDC are as follows:
Supervision – Supervision applies when someone oversees the work to ensure it is completed to the desired standard. Supervision can also involve helping the person to develop their knowledge and skills.
Direction – Direction applies when someone is providing instructions, guidance or advice on how you should complete the work. They may also coordinate how the work is being undertaken.
Control – Control applies when someone dictates how you should complete the work and what work needs to be completed. Control also includes the power to move workers from one job to another.

There are many reasons why you may decide to switch umbrella company. Perhaps you have found an umbrella company that offers a better margin, or you were not happy with the service provided by your current company. Please take a look at our umbrella company comparison guide for tips to consider when switching umbrella companies.