Registering with an umbrella company - it's easier than you may think

Registering with an umbrella company

Registering with an umbrella company isn’t as stressful as you may have imagined. To legally welcome you as an employee and process your payroll compliantly, umbrella companies must ask you for information about yourself, your assignment, and more. This page is dedicated to registering with an umbrella company. We’ll explain all of the processes involved so that you know what the standard practice is for joining an umbrella company. And remember, switching umbrella companies is a good idea if you find a more suitable provider. Still, you’ll need to complete the registration process with each new umbrella company you join each time you transfer.

Contacting the umbrella company you want to register to

Each umbrella company will have a slightly different registration process, but they’ll require you to provide the same information. In most cases, you’ll be able to sign up over the phone or by completing an online registration form.

By law, umbrella companies need to know a lot of information about you and your assignment. The usual questions you’ll be asked will involve you providing the following information:

  • Full name
  • Address
  • Date of birth
  • Telephone number(s)
  • Email address
  • Nationality
  • National Insurance Number
  • Whether or not you’re paying back a student loan
  • Bank account name, number and sort code
  • Assignment information, including the role (job title), end-client information, start date, project duration, rate of pay, etc.
  • Information about the recruitment consultant – if there is one (including their contact information)
  • Declaration – small print that confirms you’ve provided the correct information to the best of your understanding, and you’re happy to proceed

Once you have provided the information above, you can consider part 1 of the registration process complete. However, you’re not an employee of the umbrella company yet – as you’ll still need to provide more information.

P45 or New Worker Checklist (Starter Checklist for PAYE)

To ensure you’re paid accurately and are not faced with over taxation, you will need to provide your umbrella company with a P45 document. You can request this from your previous employer or your contractor accountant – if you have one.

Once you have provided your P45, the umbrella will put you on the correct tax code. However, if you don’t have a P45 – don’t worry. The umbrella company will require you to complete a government form online – referred to as the Starter Checklist for PAYE. This form shouldn’t take you long (estimate: 5 minutes), and in most cases, you’ll need to complete the form, save it as a PDF, and then email it to your umbrella company.

Contract of Employment

Once the umbrella company has received the information they need to pay you legally, they will send you an Employment Contract. It’s essential that you read this thoroughly and you’re happy with everything before signing and returning it.

Most umbrella companies will send you an electronic version of a Contract of Employment. This will allow you to read the document online and sign it electronically using software such as DocuSign. If you have any questions about the Contract of Employment, contact your umbrella company – as they should be happy to help.

Additional information

Extra resources will be sent your way – make sure you read them!

You’ll be sent plenty of information once you join an umbrella company, including information on getting paid, submitting timesheets, an Employee Handbook, etc. You must read all of the information you receive so that you can work on your assignments with complete peace of mind – knowing that your payroll is taken care of.

Pension contributions

You’d be amazed at how often umbrella employees complain about pension contributions! We understand many contractors won’t want to contribute towards the umbrella company’s preferred pension provider, but they legally must enrol you into a pension. You can opt-out once you’ve made your first contribution, and providing you do this quickly and without hesitation, you can claim back your first amount. Remember – the umbrella has to do this to operate compliantly.

Example payslip

Most transparent umbrella companies will send you an example umbrella company payslip – so you know what they look like, and what each figure means. If you don’t get one, it’s worth asking them for one.

Expenses

It’s also guaranteed that you will not be able to claim tax relief on travel and subsistence expenses due to legislation that was introduced in 2016 (supervision, direction and control). Therefore, if you join an umbrella company that is actively promoting umbrella company expenses, you may want to reconsider joining them, as they may be acting unlawfully.

Leaving your umbrella company

Leaving an umbrella company should be quick and easy. All you should need to do is contact them and express your desire to leave. They should then issue you with a P45 document, leaving you free to join another umbrella – should this be your desire.

Compliance is critical

The registration process we’ve outlined above is just for information purposes, and it’s not based on a specific umbrella company. However, you can be assured that most umbrella companies will operate very closely to our example above. If you register with an umbrella company that doesn’t ask for thorough information about you and your assignment – alarm bells should be ringing. It’s the law that requires umbrellas to ask for so much information, so if you come across a provider taking short cuts, they may be non-compliant with UK tax law. Using such a company (possibly a tax avoidance scheme) could land you in serious trouble because you could end up paying the wrong amount of tax.

We recommend our readers only consider joining an FCSA or Professional Passport accredited umbrella company. Both professional bodies are dedicated to ensuring the supply chain of temporary workers is compliant and ethical. Providers who have obtained these accreditations must have been able to prove they operate compliantly.

Click here to see our top 10 umbrella companies!

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