There has been a huge growth in the number of agency workers that use umbrella companies since 2007. This has been fuelled by the need for a more flexible workforce during what have been very challenging times for UK plc.
Agencies can put themselves and their workers at huge risk if they use an umbrella company that is not compliant with tax and employment legislation. The risk of debt transfer, penalties and loss of reputation are very real if you choose the wrong company.
At Simplyco we have operated compliantly since our inception in 2007. Here’s a snapshot of how we work.
Simplyco Umbrella is an employer and therefore all contractors working with us should sign a Contract of Employment, also referred to as a contract of service. This contractual arrangement establishes the rights and obligations in such matters as maternity pay, sick pay and employment protection.
AGENCY WORKER REGULATIONS
As an umbrella company, we operate within AWR. We request comparator information at 12 weeks to ensure all contractors receive equal treatment to client employed colleagues.
Our staging date is in 2015 and we will be pairing up with a reputable pensions provider who will be required to demonstrate best practice and returns for our employees.
The great news is that anyone employed through our umbrella company are not affected by IR35 because they are fully employed and paid under the PAYE scheme. Limited company contractors are affected however and can take advantage of our IR35 contract review service.
MANAGED SERVICE COMPANY LEGISLATION
This came into force in 2007 and the debt transfer provisions can put agencies right in the firing line. Simplyco Umbrella operates a strict PAYE scheme which removes any risk to our agency customers. Our limited company accounting business has been designed and tested to ensure that Simplyco and their clients are not MSCs.
NATIONAL MINIMUM WAGE
Simplyco Umbrella pays at least the National Minimum Wage. We never have and never will substitute earnings below NMW with expenses. For this reason we only accept contractors where the agency rate is £9.00 per hour and above. The minimum wage does not apply to our CIS service as long as the worker is a genuinely self-employed individual.
It is critical that an umbrella company is correctly insured and that your industry sector is fully covered. At Simplyco we hold Employers Liability Insurance, Public Liability Insurance, Products Liability and Professional Indemnity. Crucially we are covered to work in most sectors including the rail sector. Many umbrella companies may have cover for the rail sector but this cover does not extend to track side work.
Simplyco Umbrella operates a strict expenses policy. All expenses claims must be submitted using the appropriate form and supported by receipts.
CONDUCT OF AGENCY REGULATIONS
Our umbrella employees will tend to opt out of these regulations and we can process any opt out notices supplied. With regard to limited company contractors the decision is very much their choice although not opting out can present an element of risk to their IR35 status.
OFFSHORE EMPLOYMENT INTERMEDIARIES
Simplyco are a UK based company, and we always have been. Our directors and shareholders are all UK residents. All incomes are taxed in the UK under the PAYE regime. As a company we fully support the clamp down on offshore operators and we welcome this new piece of legislation.
RIGHT TO WORK IN THE UK
At an early stage in the on boarding process proof of right to work is taken and then verified using URU identity verification.
At an early stage in the on boarding process proof of identification is taken and then verified using URU identity verification.
We ensure that all staff adhere to equal opportunities in both the spirit and letter of the law.
It has never been more important to ensure you carefully check the way your umbrella company operates. The risk to you and your contractors is very real.
Call our agency team today on 01900 898 440 to discover how a compliant umbrella company operates.
Simplyco are expert contractor accountants and provide a fully compliant, honest service to contractors, freelancers, interims and locums. To enquire about any of our services, please give us a call on 01900 898 440 or email firstname.lastname@example.org.
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