There has been a noticeable rise in demand for umbrella companies – especially since HMRC introduced changes to off-payroll in the public sector (IR35) in 2017. Now that similar changes are coming to the private sector, umbrella companies have never been in such high demand! If you’re new to umbrella companies, you may have many questions. That is where our website comes in handy! Take a browse, and hopefully, we’ve got your questions covered. However, in this article, we’ll explain just how easy it is to join an umbrella company. Check out the 5 steps below.
Step 1 – Choosing an umbrella company
First things first – you need to choose an umbrella company to manage your payroll. There is certainly plenty to choose from, so make sure you pick a compliant umbrella company with a good reputation. You must avoid tax avoidance schemes because they could land you in serious trouble with HMRC. The following article will help you pick a reliable umbrella company: What to look for from an umbrella company in 2021.
Step 2 – Contacting the umbrella you want to join
When you’ve chosen an umbrella, you need to contact them and let them know you’re ready to join.
Step 3 – Registering with the umbrella
You’ll be able to sign up over the phone or by completing an online registration form. The umbrella company will require a lot of information from you to process your payment, including:
- Full name
- Date of birth
- Contact information
- National Insurance Number
- Bank details
- Assignment Details
Step 4 – Providing the umbrella with the necessary documentation
Once you have completed the initial registration process and have provided information about yourself, the umbrella will need additional documentation. This will include:
- A P45 document or a New Worker Checklist
- Proof of your right to work in the UK, if you are not a UK national
Step 5 – Returning the ‘Contract of Employment’
The final stage to join an umbrella company is reading, signing and returning the Contract of Employment. Most umbrella companies will send this to you via email, and you’ll be able to read it, digitally sign it and send it back to them – in your leisure. However, it’s in your interest to do this as quickly as possible to ensure your payments run smoothly.
The umbrella company you have chosen will enter into an overarching agreement with your end-client and agency in the background. When you have worked and submitted timesheets, your end-client will pass your funds down the supply chain to your agency (if there is one) and then the agency will send the gross funds to your umbrella. The umbrella company will make the appropriate deductions to your pay (tax, National Insurance, etc.), and you’ll then receive your net salary (PAYE).
It’s pretty easy to join an umbrella company
In reality, it’s pretty straightforward to join an umbrella company. It may be frustrating having to provide a lot of personal information and proof of identity, etc. However, this is necessary for the umbrella company to be legally able to process your payroll.
Top 10 umbrella companies
If you’re actively looking for an umbrella company to process your payroll, please check out our top 10 umbrella companies. They’re all accredited by the FCSA – The UK’s leading professional body dedicated to ensuring the supply chain of temporary workers is compliant and ethical. And, some of them have fantastic offers on at the moment.