8 Key Steps to Start Using Umbrella Services

Umbrella companies bridge the gap between full time employment and self-employed contracting. They take care of payroll, provide regular payment terms and in some cases offer employment benefits like paid holidays and sick pay.

To sign up with an umbrella company online you’ll need to disclose some personal information along with signing a contract of employment, just like you would if you were accepting a job. Of course, working for an umbrella isn’t quite like any other means of employment but the paperwork you’ll fill out is very similar.

All of the applications on Umbrella Broker are hosted by Adobe Sign, a safe and secure way to sign your contract and pass your personal details onto the umbrella.

Umbrella Broker does not store the details you enter into these forms, they go directly to your new umbrella.

Examples of the information in an application include:

  • Your name and address
  • Your contract details
  • Your bank details (so they can pay you)

When you’ve completed your application, you chosen umbrella will hand hold you through a series of steps designed to ensure your payments run smoothly.

Read on as we look at umbrella companies and how the process works after applying.

1. Contacting your client or agency

Having applied, your umbrella company will contact your end client or recruitment agency. They do this to inform clients or agencies that they will be invoicing on your behalf. This is a key step for yourself, your client or agency and your umbrella company as it’s the main thing that will be changing for all parties. You no longer have to worry about invoicing or chasing up payments.

2. Verification

Your umbrella company also needs to verify your identity. As a company you work through, they may never meet you. But they still need to check you’re entitled to work in the UK, for instance. To do so, they usually need a copy of your official ID documentation.

This is also important because they need to cover you under their insurance. Umbrella companies typically provide public liability, professional indemnity and employers’ liability insurance for their employees. Again, this is a worry taken off your mind as it covers you against most damages, compensation or legal fees.

3. Engagement

To assist with set up, your agency or client will send an engagement pack to the umbrella company. This will include a schedule of your work and payment terms. Within this, your client or agency will also request details of your umbrella company’s insurance information and evidence of tax compliance, in some instances. Essentially, it’s a way of making sure you’re covered from day one.

4. Contract exchange

Your agency and umbrella company will exchange a contract for service. This outlines the agreement between the two companies and is separate from the contract you’ll sign with the umbrella company to become an employee.

5. Timesheet

Once the contracts are in place, your umbrella company will add you as an employee and walk you through the process of providing them with a timesheet. Your timesheet contains information about the hours you’ve worked each week for one or multiple clients, as well as any expenses you’re entitled to claim.

6. Invoicing

Once you submit your first timesheet, your umbrella company will raise an invoice for your work and send it to your recruitment agency or end client. The client or agency will pay your umbrella company, who will process the funds through pay as you earn (PAYE) tax either the same day or the day following payment.

7. Payment

The next step depends on the payment terms you have agreed with your umbrella company. They will either pay you weekly or monthly, with all the funds you have accumulated for that period – minus tax and national insurance. You will receive a net payment along with a payslip for your own records, as you would with a regular employer.

8. Tax payments

Finally, it’s up to the umbrella company to process the money deducted from your pay for income tax and national insurance. Once a month, they will send the correct amount to HMRC on your behalf.

Steps you should take

If you’re ready to choose an umbrella company, there are also some steps to take yourself to make sure you get the right umbrella services for you.

1. Background check

Find out as much as you can about the umbrella company’s background. Check their credit rating and how long the company has been trading. Both of these are good indicators of how much you can trust a company.

2. Check the fees

Umbrella companies charge contractors a fee for their services, which can vary depending on the provider. Find out whether you will be paying weekly or monthly – and how much you’re paying.

3. And what’s included…

The cheapest umbrella services aren’t always the best. Some umbrella companies will charge extra for things like processing your expenses, while others will include benefits like statutory leave and sick pay as part of their fee. Consider the monetary value of these benefits when you’re comparing umbrella companies.

4. Contracts

Your umbrella company acts as a full-time employer, so you want to make sure you’re covered with a full contract of employment. This is where your statutory rights and benefits will be outlined, so it’s essential to check over before signing anything. Look for payment terms – when and how you’ll be paid – along with the process or penalties should you want to leave.

5. Support

Another key element in your umbrella service is the support on offer. Firstly, what are the umbrella company’s opening hours? Do you have a contact for outside-of-hours support? Contracting is far from a 9 to 5 lifestyle, so you’ll want to be able to contact them whenever you need assistance.

Secondly, how are timesheets submitted? It may be useful if your umbrella company provides an online portal, making it easier to keep track of what you’ve submitted and do things when it suits you.

Umbrella comparison made easy

Umbrella Broker provides a quick and easy way for contractors to compare umbrella companies. We provide up to ten free umbrella quotes in under 2 minutes, so you don’t have to do the hard work.

Need any assistance? Feel free to get in touch with our team.