Umbrella Companies | Videos

Umbrella company videos

Our team has created a series of videos to help answer some of the most commonly asked questions about umbrella companies. Please scroll down to discover all of our videos which are hosted on the Umbrella Companies YouTube Channel. It is worth checking back regularly as we are frequently adding new content.

What is an umbrella company?

If you are new to contracting, understanding what an umbrella company is may be difficult. In this short video, we explain the basics, including what an umbrella company is and how they process your payroll compliantly with HMRC (in accordance with Pay As You Earn – the government’s tax system).

What is an umbrella company margin?

The only income that umbrella companies generate is the margin they deduct each time they process the payroll of an employee. In this video, we explain umbrella company margins in more details – to help you understand how compliant umbrella companies operate, and spot any suspicious deductions from unethical and non-compliant providers.

What should be included in an umbrella company payslip?

When an umbrella company pays you, you should receive a payslip that shows all of the legal deductions that have been made. These include income tax, Employee’s National Insurance, student loan repayments, employment costs, pension contributions, and possibly more. Please watch the video below about umbrella company payslips to better understand what deductions you should expect to see.

How do you identify the best umbrella company?

There are over 500 umbrella companies in the United Kingdom. While it’s great to have a lot of choices, picking the best umbrella company may be a real challenge. To help you make a well-informed decision, this video explains how you can identify the best umbrella company for your circumstances.

What are the advantages of using an umbrella company?

There are plenty of advantages of using an umbrella company for your payroll. In this video, we outline the most common. Please make sure you watch the next video too because it outlines the main disadvantages of using an umbrella company.

What are the disadvantages of using an umbrella company?

Like most things in life, there are pros and cons, and umbrella companies are no different. In this video, we explain the most common disadvantages of using an umbrella company for your payroll. The previous video explains the most common advantages – if you want to run a comparison.

What are the warning signs of a non-compliant umbrella company?

It is extremely important you use a compliant umbrella company for your payroll because if you don’t, you could receive a life-changing tax bill in the future. In this video, we summarise the most common warning signs of a tax avoidance scheme. We must stress that you should never use an unethical tax avoidance scheme. Always carry out thorough due diligence, and seek further advice from the government’s website.

How do you register with an umbrella company?

Registering with an umbrella company is a pretty easy process. Still, you will need to provide them with a lot of personal information, including name, address, bank details, NI number, assignment information, and more. You will also be required to sign and return an employment contract. Please watch our video below for more information about registering with an umbrella company.

Can you claim expenses with an umbrella company?

Since the introduction of legislation in 2016 called Supervision, Direction and Control (SDC), it’s extremely unlikely you will be eligible to claim tax relief on travel and subsistence expenses when being paid by an umbrella company. However, in some scenarios, it is possible to claim expenses (as if you were a full-time employee), and the video below will explain this in more detail.

Is the umbrella company sector regulated by the government?

While a majority of umbrella companies operate compliantly, ethically and in the very best interest of their employees, a few are not. This has given the industry somewhat of a bad name. In this video, we explain the government’s stance on umbrella companies and whether or not the umbrella company sector is regulated. We also summarise the importance of the Freelancer and Contractor Services Association (FCSA) and Professional Passport.

How much does it cost to use an umbrella company?

You would be amazed how often temporary workers ask – how much does it cost to use an umbrella company? The answer is simple – not much. Compliant umbrella companies will deduct a margin each time they process an employee’s payroll, which is the umbrella company’s only source of income. Watch our video below for more information about umbrella company costs.

What are the employment costs when using an umbrella company?

One of, if not the most contentious area when using an umbrella company is the employment costs. In this video, we explain what the employment costs are (the Apprenticeship Levy and Employer’s National Insurance Contributions) and why these are deducted from the assignment rate.

What insurance is included when using an umbrella company?

Most umbrella companies in the UK will provide comprehensive insurance as part of their service. The most common insurances that are included are Employers Liability Insurance, Public Liability Insurance and Professional Indemnity Insurance.

How do pensions work with an umbrella company?

Compliant umbrella companies are legally required to auto-enrol you into a pension scheme. However, you can choose to opt-out if you wish. This video explains how pensions work when using an umbrella company.

How should umbrella companies process holiday pay?

Recently, there has been cases reported where umbrella companies have unethically retained the holiday pay of their employees. In this video, we explain how compliant umbrella companies should process workers’ holiday pay – to help ensure you get the holiday pay you deserve.

Click here to see our top 10 umbrella companies!
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